Alibaba Group signage is posted outside the New York Stock Exchange prior to the company's initial price offering (IPO) on September 19, 2014 in New York City.
Andrew Burton—Getty Images
September 22, 2014 9:42 AM EDT

This post is in partnership with Fortune, which offers the latest business and finance news. Read the article below originally published at

By Laura Lorenzetti

Alibaba Group’s record-breaking initial public offering is worth $25 billion after bankers released additional shares, commonly referred to as the “green shoe.”

Bankers leading Alibaba’s IPO maximized the size of the deal by issuing about 48 million additional shares, pushing up the offering value of the Chinese Internet giant. Alibaba surpassed Agricultural Bank of China’s $24.3 billion IPO to become the biggest ever.

The “green shoe” option allows bankers to sell more shares from the company in order to cover high investor demand. Had the IPO not attracted so many enthusiastic investors, the additional shares likely wouldn’t have been tapped, leaving Alibaba’s offering total at the original $21.8 billion.

Alibaba priced its IPO at $68 share to initially become the biggest U.S. offering ever. Its shares then opened over 36% higher than the offering price at $92.70 and finished out the first day of trading at $93.89.

The first-day pop was nearly two-times higher than usual. Most IPOs open 15% higher than the offering price, according to David Ethridge, head of capital markets for the New York Stock Exchange.

After its first day of trading, Alibaba’s market value is $231.4 billion, larger than other industry standard bearers like Amazon, Facebook and Twitter.

More Must-Read Stories From TIME

Contact us at

Read More From TIME
You May Also Like