Internet

Alibaba shares make their debut at $92.70

The Chinese company's record-breaking initial public offering is paying off with a splashy opening on the New York Stock Exchange.

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Workers renovate a building at the Alibaba head office in Hangzhou, east China's Zhejiang province on September 15, 2014. STR/AFP/Getty Images

Alibaba's shares opened at $92.70 on the New York Stock Exchange on Friday, marking the first step for the Chinese online retailer to become a true global player.

The price quickly shot up to a high of $99.70 before dropping back down to low 90s. The stock closed at $93.89.

Alibaba broke records with its pricing as the largest initial public offering in US history, raising $21.8 billion. The record was previously held by Visa, which raised $19.1 billion with its IPO. Alibaba's IPO far surpasses Facebook, which enjoyed a run-up of hype before it went public and was previously the largest IPO for a technology company. The social-media titan raised $16 billion in the offering.

Sandeep Dahiya, an associate professor of finance at Georgetown University, said Alibaba was well-positioned to deliver.

"You could not have asked for a better alignment of the stars," he said, adding that the US stock market continued to improve after the company announced its intentions, giving Alibaba an ideal environment to raise its funds.

As with any other IPO, the raising of this cash will mostly benefit Alibaba's early investors. Half of what the offering generates will likely go to former CEO and co-founder Jack Ma, Softbank and Yahoo.

But the rest of the money will go toward Alibaba's expansion outside of its home turf, which could impede on the business of US e-commerce giants Amazon and eBay.

For Yahoo, a company that is struggling to remake itself, the Alibaba IPO means cashing in on a longtime investment. The US tech and media company, which now has a 16.3 percent stake in Alibaba, raised $8.27 billion from the offering.

Correction, 9:22 a.m. PT: This story initially had the incorrect opening price for Alibaba shares. It was $92.70

Updated, 1:01 p.m. PT: Added the day's high and final closing price.