This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Alibaba Chooses New York For IPO

NEW YORK (The Deal) -- China's Alibaba Group Holding Sunday unveiled plans for what is likely to be the biggest U.S. initial public offering since Facebook (FB - Get Report) as it works to take its China-centric e-commerce platform abroad.

Alibaba gave few details of its plans, though the New York sale is expected to value the company at between $140 billion and $200 billion and provide a windfall to major shareholders Yahoo! Inc. and SoftBank Corp., which own 24% and 37%,respectively.

"This will make us a more global company and enhance the company's transparency, as well as allow the company to continue to pursue our long-term vision and ideals," Alibaba said.

The online retailing and wholesaling site has reportedly shortlisted Credit Suisse Group, Deutsche Bank AG, Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Citigroup Inc. to manage the sale. Simpson Thacher & Bartlett LLP is expected to be counsel on the listing.

Must Read: Alibaba Confirms U.S. Listing, Yahoo! Surges

The IPO comes after months of negotiations with the Hong Kong securities regulator.

Alibaba had asked the regulator to change rules to accommodate its corporate structure. The company wants only executives and partners to have the right to appoint its board, allowing them to maintain control but going against Hong Kong regulations that require all shareholders to have equivalent rights.

"We wish to thank those in Hong Kong who have supported Alibaba Group. We respect the viewpoints and policies of Hong Kong and will continue to pay close attention to and support the process of innovation and development of Hong Kong," the company said. "Should circumstances permit in the future, we will be constructive toward extending our public status in the China capital market in order to share our growth with the people of China."

The site was founded in 1999 by English teacher Jack Ma, now its chairman. It has grown into a company that had sales of $1.78 billion in the three months to Sept. 30. 51% up on the year earlier, with about 25,000 employees. The company is expected to use some of the proceeds to extend a current shopping tear to remain competitive.

Earlier this month it said it would increase its 28.7% stake in online content provider ChinaVision Media Group Ltd. to 70% in an HK$6.24 billion ($798.4 million) agreement. Last month it also announced a $1.85 billion takeover agreement for Beijing-based, Nasdaq-listed AutoNavi Holdings Ltd., which offers Internet-based maps and navigation services.

Only a fraction of the company's shares are expected to be listed, though analysts expect the sale to raise at least $15 billion. Facebook Inc. raised $18.4 billion in 2012 in an offering that valued the company at well over $100 billion.

Sunnyvale, Calif.-based Yahoo!'s Alibaba investment predates the arrrival of CEO Marissa Mayer, who is using acquisitions to buy not only sales but also talent. The executive has made nearly two-dozen purchases, including the $1.1 billion buy of sharing site Tumbr Inc.

Yahoo first became an Alibaba shareholder in 2005, getting $1 billion and a 40% stake in exchange for its Chinese Yahoo! portal. Alibaba essentially bought back a 16% stake for $6.3 billion in 2012.

Analysts have said both Yahoo and SoftBank have served as proxies for investors interested in getting a piece of Alibaba. Softbank shares closed 4.9%, or ¥381, higher at ¥8,110 ($79.60) Monday.

The prospectus should be published next month and the listing is planned for the third quarter, according to Reuters.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
FB $96.35 2.30%
AAPL $123.38 0.50%
GOOG $628.02 0.12%
TSLA $265.00 4.70%
YHOO $37.71 -0.33%

Markets

Chart of I:DJI
DOW 17,630.27 +189.68 1.09%
S&P 500 2,093.25 +25.61 1.24%
NASDAQ 5,089.2060 +49.43 0.98%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs