Boston, MA 09/25/2014 (wallstreetpr) – Alibaba Group Holding Ltd (NYSE:BABA) was the buzz word recently with its highest ever IPO in the U.S., but when Citizens Financial Group Inc (NYSE:CFG) started trading with highest U.S. bank IPO, it did not gain equal popularity. Despite the fact that more number of people have heard about or used the Citizen’s name than Alibaba, but the former still did not manage to translate into a blockbuster IPO.
Comparison between Alibaba and Citizen IPO: The First-Day Performance
Citizens Financial Group Inc (NYSE:CFG) simply faded away when compared to the Alibaba IPO. First, the U.S. Bank was not priced as per the expectation, and this is not ideal at all. It traded higher by merely 7% yesterday, i.e., on its first day. Now, looking at Alibaba Group Holding Ltd (NYSE:BABA), it was priced just like what was expected from it. And, did it surge? On the first day, it was flying at 38%, which is something out of the box. Nevertheless, it has retracted since then.
Not Much Hype
The IPO of Citizens Financial Group Inc (NYSE:CFG) did not attract as many eyeballs as Alibaba did. However, it has been observed that the “general IPOs” will come back to normal because Alibaba has already played its part!
Why Citizen IPO is Imperative?
However, Alibaba Group Holding Ltd (NYSE:BABA) IPO is not as crucial to the U.S. as Citizens Financial Group Inc (NYSE:CFG)’s. First, because it is the highest IPO of any U.S. bank, since the debut of Goldman Sachs Group Inc (NYSE:GS) in 1999. Royal Bank of Scotland Group plc (ADR) (NYSE:RBS), the owner of Citizen, sold 140 million shares from it and clutched $3 billion in its paws. The IPO of Citizen is indeed a vital stepping stone for the RBS, especially in light of Scotland’s decision to be under the U.K. shade. Initially, Scotland’s independence had led to apprehensions that RBS might shift its base to South.
The other major reason is that Citizen will now be a very lucrative takeover option for the suitors, given the partial break-up from the RBS. It is an 18th biggest U.S. bank with the assets worth $130 billion. But still it remained outshined by the banking industry titans like Wells Fargo & Co (NYSE:WFC), Citigroup Inc (NYSE:C) and Bank of America Corp (NYSE:BAC).
