Economy

Alibaba knocks IPO out of the park; Bank of Queensland to fork out $17m in compo for Storm Financial scandal: Midday Roundup

Eloise Keating /

Shares in Chinese ecommerce giant Alibaba surged 38% in first day of trading on the New York Stock Exchange, with the 15-year-old company now worth more than Amazon and eBay combined.

Alibaba shares were priced at $US68 ($A76.06) in the company’s initial public offering, rising to $US93.89 on Friday and giving the company a market value of $US231.4 billion ($A258.8 billion), according to Bloomberg.

Overall, Alibaba raised $US21.8 billion through the offer, which smashed previous IPO records.

It was a big pay day for Jack Ma, who founded Alibaba in 1999 with just $US60,000. China’s richest person added $US5 billion to his personal fortune on Friday by selling 12.75 million shares in the IPO.

Now worth more than $US18 billion, Ma told US media outlets he finds inspiration in an unlikely place: Forrest Gump.

“I’ve been watching that movie about 10 times. Every time when I’m frustrated I watch the movie … I watched the movie before I came to New York,” said Ma.

Bank of Queensland to fork out $17m in compo

The Bank of Queensland has agreed to pay $17 million in compensation to victims of the Storm Financial scandal.

The Australian Securities and Investment Commission brought action against a number of banks in 2010 after it alleged the banks breached contracts and broke laws under the Trade Practices Act relating to the collapse of Storm Financial in 2009.

The collapsed company left debts of $88 million, with some customers losing their entire investments and homes through the scandal.

The Australian reports  the gross payment by the bank to settle the legal action will be $19.7 million, including $17 million for customers caught up in the scandal.

Acting chief executive Jon Sutton said customers eligible for compensation would be contacted and had the option of either accepting a settlement or remaining on their current repayment plan.

“We are pleased to have reached a resolution to this long-running issue and will now work towards providing certainty to the customers who were involved,” he said in a statement.

The Commonwealth Bank and Macquarie Bank have previously agreed to compensate customers.

Local shares open flat

Aussie shares have opened flat this morning after the price of iron ore slumped to its lowest point since the global financial crisis.

The S&P/ASX200 benchmark was down 47.1 points to 5386 points at 12.19pm AEST. On Thursday, the Dow Jones closed up 0.8%, rising 13.75 points to 17,279.7 points.

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Eloise Keating

Eloise Keating is the editor of SmartCompany. Previously, Eloise was news editor at Books+Publishing, the trade press for the Australian book industry.

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