Apple, Alibaba Post New Highs on Tie-Up Comment

By Paul Ausick Updated Apr 27, 4:14PM EDT · Published Oct 28, 12:30PM EDT

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When the guy who engineered the world’s largest-ever initial public offering (IPO) says he is interested in partnering with the world’s largest company by market cap, people notice. The founder and executive chairman of Alibaba Group Holding Ltd. (NYSE: BABA) did just that Tuesday, saying that he hoped Alibaba and Apple Inc. (NASDAQ: AAPL) could “do something together” in the digital payment business.

The launch of Apple’s iPhone 6 and 6 Plus in early September and the launch of Apple Pay earlier this month could be a good fit with Alibaba’s Alipay service, which already has 300 million users. And because every owner of a new iPhone 6 or 6 Plus is also signed up for iTunes, every new iPhone that is shipped snags another of the 800 million users who already have a payment option selected for their iTunes accounts.

Alibaba has already launched a shopping website in the United States, and its market cap, which has grown about 40% since the IPO, is larger than that of Amazon.com Inc. (NASDAQ: AMZN) and eBay Inc. (NASDAQ: EBAY) combined. The Chinese company may be most interested in Alipay as an entry point into China’s brick-and-mortar businesses.

Is a business alliance of some sort between Apple and Alibaba even possible? Assuming the technical issues can be solved, that still leaves at least two governments that will have something to say about any kind of cooperative venture. The Chinese government already allows Chinese consumers to transfer money from their banks to their Alipay accounts. And those banks are beginning to resist allowing non-banking businesses to offer traditional banking services. That opposition will only get stronger if Apple is allowed in.

Nothing is likely to happen soon, but Alibaba chief Jack Ma has stirred up an interesting pot.

Apple’s stock traded at $106.27, up 1.1%, at the noon hour Tuesday, after posting a new 52-week high of $106.37 earlier. The 52-week low is $70.51.

Alibaba shares traded at $99.90, up more than 2%, after posting a new post-IPO high of $100.50. The post-IPO low is $82.81.

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About the Author Paul Ausick →

Paul Ausick has been writing for a673b.bigscoots-temp.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.