China's Alibaba embarks on U.S. IPO journey

SAN FRANCISCO Wed May 7, 2014 3:43am IST

An employee walks pass a logo of Alibaba during a media tour organised by government officials at its headquarters on the outskirts of Hangzhou, Zhejiang province, June 20, 2012. REUTERS/Carlos Barria/Files

An employee walks pass a logo of Alibaba during a media tour organised by government officials at its headquarters on the outskirts of Hangzhou, Zhejiang province, June 20, 2012.

Credit: Reuters/Carlos Barria/Files

Related Topics

Stocks

   

SAN FRANCISCO (Reuters) - Alibaba Holdings Inc gave investors a closer look at the scale and growth of the Chinese e-commerce juggernaut in an IPO prospectus filed Tuesday in the first step of what could become the largest technology debut in history.

Alibaba, which powers four-fifths of all online commerce conducted in the world's second-largest economy, is expected to raise upward of $15 billion and potentially surpass the $16 billion that Facebook Inc managed in 2012. It will become the largest Chinese corporation to have sought a home on U.S. exchanges

The company handled more than 1.5 trillion yuan, or about $248 billion, of transactions for 231 million active users across its three main Chinese online marketplaces in 2013, more than Amazon and eBay combined.

"If it is able to transport that kind of power to outside China, it has the potential to become a true global ecommerce powerhouse," said Roger Entner, Lead Analyst and Founder of Recon Analytics.

"Everybody thought Amazon could do it but now we have to rethink Amazon in the light of being the most successful company in that field in the U.S. -- but not in the world."

Unlike many of the more prominent U.S. technology IPOs of recent years, Alibaba’s list of significant shareholders is short. By contrast, Facebook and Twitter each broke out shareholdings from more than a half dozen individual principal shareholders.

Former English schoolteacher and co-founder Jack Ma now owns 8.9 percent of Alibaba. Yahoo Inc and Softbank own 22.6 percent and 34.4 percent of the company, which said on Tuesday it is still deciding between the New York stock exchange and the Nasdaq as a listing venue.

Yahoo must sell roughly 40 percent of its Alibaba stake in the IPO or sell the shares back to Alibaba directly prior to the IPO.

Yahoo and Softbank may be among the biggest beneficiaries of Alibaba's IPO, but neither will exercise much control of the Chinese company despite their shareholdings.

Under an agreement struck with those two major shareholders, Yahoo Chief Development Officer Jacqueline Reses will resign from the board upon the listing, while Softbank will have the right to nominate just one director to a new, 9-member board.

Alibaba's IPO has spurred levels of excitement in Silicon Valley and Wall Street circles unseen since Facebook Inc's record-breaking $16 billion coming-out party.

It will debut in a stock market where high-flying stocks like Twitter's and Amazon's have in past weeks been brought back to earth, in a selloff that has polarized Wall Street even as it revives doubts about soaring tech-sector valuations.

The proposed IPO size in Tuesday's filing is an estimate for the purpose of calculating exchange registration fees. Analysts expect the company to eventually raise an amount surpassing Facebook's, garnering a market value of more than $160 billion.

Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, Morgan Stanley and Citigroup will underwrite the IPO.

(Reporting by Gerry Shih, Alexei Oreskovic, Sarah McBride, Deepa Seetharaman and Nicola Leske; Editing by Alden Bentley and Andrew Hay)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Earnings Season

REUTERS SHOWCASE

Monsoon Revives

Monsoon Revives

Monsoon revival keeps rain above average   Full Article 

Tackling Food Prices

Tackling Food Prices

India to free up extra 10 million tonne wheat in open market  Full Article 

Just Not Enough

Just Not Enough

Amazon's smartphone fails to kindle a "Fire" among reviewers.  Full Article 

Struggling Economies

Struggling Economies

Asian economies to struggle on weak export demand - Reuters poll  Full Article 

Mining Roadblock

Mining Roadblock

Coal India's plans for 20 mines hit by land, environment delays  Full Article 

Power Jolt

Power Jolt

UAE's TAQA pulls out of India power plant deal with Jaiprakash  Full Article 

Factory Sector

Factory Sector

China July HSBC flash PMI at 18-month high of 52.0   Full Article 

Currency Reserves

Currency Reserves

Sri Lankan, Indian central banks agree scope for government debt buys.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage