Could Alibaba’s Market Value Top GE’s?

By Douglas A. McIntyre Published Oct 29, 6:39AM EDT

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Much of the news coverage about Alibaba Group Holding Ltd. (NASDAQ: BABA) has been that its market cap has reached the same level as that of Wal-Mart Stores Inc. (NYSE: WMT) — about $247 billion. However, more impressively, the Chinese e-commerce giant could soon be worth more that storied conglomerate General Electric Co. (NYSE: GE), which has a market cap of $260 billion.

GE’s fortunes have eroded since current CEO Jeff Immelt took over in 2001. GE has moved in and out of several businesses. However, its revenue in 2004 was $152 billion. Last year the number was only $145 billion. Net income figures are no better. In 2004, it was $16.6 billion. Last year, it was $13.3 billion.

Despite recent sales stagnation, Walmart’s revenue has grown from $288 billion in 2004 to $476 billion last year. Net income has risen from $10.3 billion to $16.0 billion. Throughout the entire period, margins have been thin.

The GE and Walmart annual results and market cap levels are one more proof of the discount Wall Street gives to dead or dying growth, particularly if it lasts for several years.

Over two years, Facebook Inc. (NASDAQ: FB) made an advance similar to Alibaba’s. The social network’s market value is $210 billion. With its most recent earnings, though, that market cap could fall below $200 billion. It is a ridiculously high number, but at least retreating.

Before Alibaba shares fall, and they will, GE’s management can add to its woes the fact that a Chinese e-commerce company, founded only a few years ago, has passed it, at least as the market sees its value.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.