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 Profits More Than Double as U.S. IPO Looms

NEW YORK (TheStreet) -- Profits at Chinese e-commerce giant Alibaba more than doubled in the fourth quarter to over $1.3 billion as revenue at the Jack Ma-founded company topped $3 billion. The company's revenue growth and rising profit margins augur well an expected initial public offering in the United States.

Alibaba Confirms U.S. Listing as Yahoo! Surges

For the Oct. to Dec. period, Alibaba earned $1.36 billion on $3.058 billion in revenue, a rise of 110% and 66%, respectively versus 2012 levels. Gross margins at the company rose to $2.37 billion, or 73% year-over-year.

Those results were disclosed in a supplement appended to Yahoo!'s (YHOO - Get Report) first-quarter earnings. Yahoo is a 24% owner of Alibaba and is poised for a tremendous windfall when the so-called Amazon (AMZN - Get Report), Google (GOOG) and PayPal of China lists its shares in 2014.

Must Read: Diageo Plans New Offer for United Spirits

Results disclosed on Tuesday represent Alibaba's fourth quarter earnings and include its Singles Day on November 11, the company's biggest shopping day of the year. In mid-November, Alibaba said it generated $5.7 billion of sales on this year's singles day, including $877 million in mobile transactions.

For Alibaba, strong revenue growth and rising profit margins in 2013 mark a busy twelve months.

IPO On The Horizon

In March, the company confirmed will list its shares in the United States instead of Hong Kong. The move comes after a long-running dispute with Hong Kong regulators on Alibaba's partnership structure.

U.S. exchanges, however, approved of Alibaba's structure, a source close to the matter said. There is no indication whether Alibaba will list on the New York Stock Exchange or Nasdaq. The timing of the prospective offering also remains unclear.

The Partnership

Alibaba's partnership extends to company founder Jack Ma, over two dozen senior executives who have served the company for at least five years and contributed to the company's development over the years. Partners own approximately 10% of Alibaba's shares while the rest are held by Yahoo!, Softbank, and a handful of private equity and sovereign wealth investors.

Collectively, Alibaba wants to conduct an initial public offering where its partnership will have the ability to nominate a majority of the company's board of directors. The partnership structure, however, does not call for a dual class listing of shares that might give Mr. Ma, insiders and original investors increased voting rights for their shares.

While Alibaba's partnership would be able to nominate a majority of the board, the election of those nominees would come down to a shareholder vote where every investor would have the same voting rights. According to Alibaba, it's partnership structure is aimed at preserving the company's culture.

"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 in March.

Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan and Morgan Stanley will lead Alibaba's IPO, while Citigroup will have a slightly more junior role, a person close to the situation told TheStreet in March.

-- Written by Antoine Gara in New York

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
AMZN $529.00 0.56%
YHOO $37.67 -0.13%
AAPL $122.99 -0.32%
FB $96.99 1.78%
GOOG $630.31 0.37%

Markets

Chart of I:DJI
DOW 17,751.39 +121.12 0.69%
S&P 500 2,108.57 +15.32 0.73%
NASDAQ 5,111.7330 +22.5270 0.44%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs