Chinese e-commerce giant Alibaba files for IPO in the U.S.
Alibaba Group, the Chinese Internet giant, filed Tuesday for its long-awaited initial public offering of stock in the U.S. in which it could raise as much as $15 billion.
In the filing the company made with the U.S. Securities and Exchange Commission, Alibaba proclaimed itself “The largest online and mobile commerce company in the world.”
Alibaba did not state specifically how much it plans to raise in the document, leaving those boxes blank as is typical in such initial filings. But PrivCo estimated that Alibaba, when it does fill in the numbers, will be worth as much as $195 billion.
That’s more than Facebook’s $150-billion market cap, and a little over half of Google’s $347-billion valuation.
In addition, one of the biggest winners is expected to be Yahoo, whose 24% stake in Alibaba could be worth more than $40 billion.
Jack Ma, the founder and chairman of Alibaba, owns 8.9% of Alibaba, according to the filing. That could make his stake worth more than $15 billion, easily ranking him among China’s wealthiest residents.
As for Alibaba’s business, it seems to be experiencing the kind of growth more U.S. Internet businesses can only dream about.
In the most recent quarter, according to the filing, Alibaba reported 54% year-over-year growth. And that profit of $1.38 billion? More than Amazon and EBay put together.
The Alibaba IPO has attracted a marquee lineup of U.S. investment bankers: Credit Suisse, Morgan Stanley, Goldman Sachs, J.P. Morgan and Deutsche Bank.
Lise Buyer, a partner at Class V Group, advises companies on their IPO strategies and previously worked on Google’s IPO. Buyer said it will be interesting to see if Alibaba uses some of its new cash to start acquiring Silicon Valley companies to break into the U.S. market.
She also said the size of Alibaba’s offering alone will mean that Silicon Valley will be watching it closely.
“Enormous IPOs are always worth watching,” Buyer said. “At very least we will learn something about the market’s current appetite for high-profile, foreign-based, consumer IPOs.”
Buyer also noted that the IPO’s biggest direct impact on the region may be the wealth it showers on Yahoo, which will now have a mighty war chest that Chief Executive Marissa Mayer can use to invest in new products and make more acquisitions.
“It’s too early to say what that means, but the company will have the benefit of significantly more cash in its coffers, offset by a shortened runway to prove it can stand alone and thrive, at least in a fashion that appeals to public investors,” Buyer said.
[UPDATED: 4:38 p.m.]
In the meantime, the numbers contained in the Alibaba IPO filing make it clear how big this company is, and how much bigger it could get.
Alibaba has 20,884 full-time employees and they are all based in China. And that’s where, for the moment, the company seems intent on continuing to grow.
According to the filing, there are 618 million Internet users in China out of more than 1.3 billion people. Alibaba sees big potential as more of those people come online because for the moment, the company dominates e-commerce on its home turf.
The company also said in the filing it accounts for 76% of all mobile e-commerce in China, an area that is also rapidly growing.
Finally, on the subject of big numbers, the biggest winner of all in the coming IPO may be Softbank, the Japanese investment firm. Softbank owns 34.4% of Alibaba.
