Alibaba splurges on soccer team: will it affect IPO?  

Alibaba's founder Jack Ma (right) and Evergrande's director Hui Ka Yan at the press conference. (Photo: Cnwest.com)

(ECNS) – What exactly does soccer have to do with online shopping?

For many analysts and potential investors, Alibaba's splurging on the Guangzhou Evergrande soccer team for 1.2 billion yuan ($200 million) is a head-scratcher.

The company is poised for the biggest initial public offering in American history, with an expected valuation of over $250 billion. Its massive e-commerce business has more sales than Amazon and eBay combined.

Alibaba has made a string of purchases ahead of its IPO. It bought controlling stakes in AutoNavi, an online navigation company, Youku Tudou Inc., a leading online video platform, and Alibaba Film Group. It has also ventured into online calling services and games.

All these moves are considered part of its race to dominate China's culture and entertainment market, with each outlet linked to its e-commerce platforms.

But a soccer team?

Shan Ren, a media commentator and expert in e-marketing, said Alibaba snapped up Guangzhou Evergrande on a whim. Shan said soccer and online shopping don't have obvious synergies and would probably cripple its IPO.

Jack Ma, founder of Alibaba, didn't provide much rationale for the purchase at Thursday's press conference. He did say that he comes from outside the world of soccer, which may give him a different perspective and embolden him to break rules.

Ma also said he won't interfere with the team's operation.

E-commerce expert Chen Shousong said that although it may sound like an odd move, it's highly possible that the two parties would join hands to create soccer-related merchandise to sell on Alibaba's platform.

Whether it's a good investment or a vanity purchase, there's no denying that the move has driven a heated discussion as the company prepares for its IPO.

It has also boosted confidence in related stocks.

Evergrande Property Group, which owns the soccer club, had a peak gain of nearly 5 percent on Thursday, the biggest gain since April. Sports-related stocks also spiked by nearly 5 percent, and lottery stocks rose by 3 percent.