NEW YORK (TheStreet) –– Alibaba has priced its initial public offering at $68 a share, or $21.8 billion, setting the stage for the largest initial public offering in U.S. history, according to Dow Jones Newswires.
Beijing-based Alibaba had previously raised the price on its IPO following strong investor demand as China's largest Internet company continues to post impressive results.
"Alibaba's cross-border-trade (CBT) businesses are growing very well," said ChannelAdvisor CEO Scott Wingo in an emailed statement. "You have Tmall Global, which is importing into the Tmall audience and you have AliExpress. AliExpress is growing 100% year-over-year (prospectus) and that marketplace has $2.9B in GMV (as of June 30, 2014)."
The $68 a share price values Alibaba, co-founded by Jack Ma at roughly $170 billion, with approximately 2.5 billion shares outstanding.
In the company's second quarter, Alibaba's grew revenue over 46% from year-ago levels to $2.54 billion, while total gross merchandising volumes (GMVs) rose a similar percentage, led by a near-doubling in Tmall volumes. Alibaba also disclosed in its second quarter results that mobile GMVs now account for 32.8% of the company's total marketplace volume, a near tripling from this time last year.
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Last month, Alibaba restructured its relationship with payments business Alipay in a move that gives the e-commerce giant a smaller exposure to financial services, but the potential to receive a larger pie of fees from those businesses. As part of the August deal, the value of Alibaba's interest in (SFMSC) and Alipay will also no longer be capped. Alibaba is currently due a payment of 37.5% of the value of SMFSC and Alipay in the event of an initial public offering or sale of the company. While the value of that payment had been capped at $6 billion, it is now effectively un-capped.
Yahoo! (YHOO) , which owns a 22.6% stake in Alibaba, is required to sell 140 million shares of its Alibaba holdings (down from a previous 208 million) in the IPO, expected to take place Friday morning, which would significantly boost its balance sheet. At the end of the second quarter, Yahoo! held $4.3 billion in cash, compared to $5 billion at the end of 2013, a drawdown of $700 million.