14 DAY TRIAL // The first brick for the biggest IPO in Internet history has been laid, as China’s e-commerce giant Alibaba has filed its documents.
The company didn’t explain just how many shares it would offer in its IPO, or just how much it expected to obtain, but the expectations are high, especially given the size of the company and the hype around the topic.
Closer to the IPO date, more details are certainly going to emerge about the financial side of the topic, but for now, we’re going to have to wait. It’s going to take about four months before Alibaba’s shares are traded on the New York Stock Exchange (NYSE) or the Nasdaq Stock Market.
The initial filing with the US Securities and Exchange Commission, however, is for $1 billion (€720 million), which is needed to calculate registration fees.
Bloomberg reports that the Chinese giant is hoping to sell a 12 percent stake, which would put the IPO at over $20 billion (€14.38 billion) if we take into consideration the estimated value of the company. This would top Facebook’s IPO two years ago, which debuted at a $16 billion (€11.5 billion) trade value.
Alibaba is, of course, a huge company that is worth an estimated $168 billion (120.75 billion), making it the second most valuable Internet company in the world, following in Google’s footsteps.
Alibaba was founded in 1999 by Jack Ma. The company was originally a simple business-to-business portal offering Chinese manufacturers a way to gain access to buyers from anywhere in the world.
Taobao, the consumer-to-consumer portal under Alibaba’s umbrella, offers a similar service to eBay. Now, the Alibaba Group has a lot of sites and they amount to about 60 percent of packages delivered on the territory of China.
Alipay is an online payment system similar to PayPal and it goes hand in hand with Taobao. Alibaba had to separate itself from Alipay back in 2010 after the Chinese central bank issued new licensing regulations. The Group is now trying to rebuy the stake in Alipay, but negotiations could take long, which means that the IPO could happen before the deal is done.
While investors are going to be disappointed to hear this, they are certainly enthused enough about the IPO even without Alipay.
The company will embark on a formal roadshow to get everyone excited about the public listing and a price for the shares will be set after the investor’s interest is assessed.