Chinese E-commerce Giant Alibaba Files For IPO

Chinese e-commerce giant Alibaba Group filed registration documents on Tuesday to go public in the U.S. in what may be one of the biggest initial public offerings in American history.

While the average U.S. consumer may be unfamiliar with Alibaba and its operations, Tuesday’s F-1 filing gives a clearer look into a business that accounts for 80% off all Chinese e-commerce and will rank among the world’s largest technology firms -- among them IBM and Oracle -- once it goes public. Analysts recently polled by Bloomberg News valued the company at nearly $170 billion, while some expect that valuation to surpass $250 billion, once it starts trading.

“Although the value of Alibaba has been focused on the strength it has in the e-commerce space and its ability to expand outside of China, it is worth noting that the company has great potential to grow in the domestic market,” said Nicole Peng, research director for Canalys China. “And at this point an IPO is important to support its accelerating expansion.”

For now, the exact size of the IPO remains closely guarded. Though many expect the company to raise more than $15 billion in a public offering that may still be months away, the company used a $1 billion placeholder on its registration papers with the Securities and Exchange Commission. That number is just being used to compute filing fees, said a spokesperson for the company. Alibaba also did not include details on how many shares it would be selling or its valuation in its paperwork, though those details will be disclosed in the days leading up to the IPO.

Founded in 1999 by former English teacher Jack Ma, Alibaba has expanded beyond its original blueprint as a web marketplace for Chinese companies. Having benefited from rapid economic growth within the country over the last decade, Alibaba has developed an all-encompassing retail ecosystem that ranges from payment systems to cloud computing services all with the purpose of supporting its main e-commerce plays including Taobao Marketplace and Tmall.

As of the end of December, the company had 231 million active buyers on its site, up 44% from the previous year. Alibaba also showed a strong position among mobile users, accounting for more than 75% of all Chinese retail done on mobile devices with 19.7% of its business coming from phones or tablets.

“For many Chinese consumers, Alibaba has provided a transformative experience, giving them access to products they would have never seen,” said Duncan Clark, chairman of BDA China. “What all of this did was create the architecture for e-commerce in China.”

That architecture has made Alibaba the largest e-commerce player in the world with total gross merchandise volumes on its platforms exceeding $248 billion in 2013, according to its financial filings. In the 12 months ending on March 31, 2013, the company booked $5.6 billion in revenue on profits of more than $1.3 billion. Nine months into its 2014 fiscal year, Alibaba stated revenues of more than $6.5 billion on profits of about $2.8 billion.

Forbes estimates Alibaba founder and Chairman Ma, who has a 8.9% stake in the company, to be the fifth-richest person in China with a net worth of $8.4 billion. Vice chairman Joseph Tsai maintains a net worth of about $3 billion. Both of their fortunes are expected to rise once Alibaba goes public.

After initially investing in 2005, U.S. web portal Yahoo owns 22.6% of Alibaba having sold back more than half its stake in the Chinese company in 2012 for more than $7 billion. Many analysts attribute Yahoo’s recent stellar stock performance to enthusiasm over its Alibaba holdings. After its latest earnings report in April, Yahoo shares surged after the company’s earnings supplement showed fourth-quarter sales at Alibaba rocketed 66% higher and net income soared 110% year over year. Due to shareholder agreements, Alibaba can force Yahoo to sell up to 40% of its remaining stake in the company, or 208 million shares, in its IPO.

Japan’s SoftBank is the company’s largest shareholder with a 34.4% stake. SoftBanks’ Chairman and CEO Masayoshi Son is one of four current members of Alibaba’s board, which the company eventually expects to swell to nine members.

The company did not specify an exchange or ticker symbol for its IPO. Banks involved with the deal include Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan Securities, Morgan Stanley and Citigroup.

http://www.forbes.com/sites/ryanmac/...1-billion-ipo/

China e-commerce giant Alibaba set for U.S. IPO

Chinese e-commerce giant Alibaba Tuesday filed its much-anticipated plans to sell shares in what could be one of the biggest initial public offerings ever.

Alibaba said it plans to raise $1 billion, but before it's finally priced later this year, that amount is likely to be far higher. The IPO is widely expected to surpass that of Facebook, which raised $16.4 billion in 2012, and could be nearly as big as the 2008 offering by credit card giant Visa, which raised about $17.9 billion.

Alibaba's registration statement was lengthy at more than 2,300 pages. But the specifics that really matter on Wall Street -- about the IPO itself -- were scant, at best. The filing did not specify an offering price. It did not say what exchange the American Depositary Shares would list on. And it did not reveal what Alibaba's stock symbol would be.

Still, the filing did shed light on the company's impressive business model and growth trajectory.

Started by former English teacher Jack Ma in 1999, Alibaba is a mash-up of businesses, making the bulk of its revenue as an Internet middleman, charging sellers for marketing and advertising. Alibaba's Alipay division — which is not part of the IPO — is the world's largest payment processor.

At the end of 2013, Alibaba said it had 231 million active monthly buyers, up 44% from a year earlier. For the nine months ended in December, Alibaba generated net income of $2.9 billion on revenue of $6.5 billion.

Alibaba's potential market capitalization has soared since 2012, when it was valued at less than $40 billion following a bond offering. Tuesday's registration statement further underscored Alibaba's growth potential. Online shopping represented just under 8% of Chinese consumption in 2012. But that's projected to grow at an annual rate of 27% through 2016.

As the largest e-commerce player, Alibaba is also poised to benefit from mushrooming Internet use. About 618 million Chinese — 46% of the country's population — used the Internet in 2013. That's expected to rise to 790 million by 2016, Alibaba says.

Still, Alibaba could face increasing competition from Chinese rivals, such as Tencent, notes Forrester Research analyst Kelland Willis. "One of the biggest challenges Alibaba can expect to face in the next five years is stiff competition from both digital and e-commerce players,'' Willis says.

Competition aside, Alibaba's IPO will create a windfall for Yahoo. The Internet search engine's Alibaba stake has helped bolster a sagging stock price under CEO Marissa Mayer's two-year watch.

Yahoo's decade-old investment in Alibaba has already paid off nicely. The company acquired a 40% Alibaba stake for just $1 billion in October 2005. In 2012, Yahoo sold nearly half its Alibaba holdings for about $7 billion. Yahoo, which holds a 22.6% share in Alibaba, has said it plans to sell 10% of its stake, creating a potential windfall for shareholders or allowing the company to pursue acquisitions.

Some analysts have valued Alibaba at upwards of $200 billion, meaning Yahoo's stake is worth nearly $50 billion.

Six investment banks are listed as IPO underwriters, including Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan, Morgan Stanley and Citigroup.

http://www.usatoday.com/story/money/...r-ipo/8001221/

Alibaba to List on New York Stock Exchange

Chinese Internet Giant to Use Symbol 'BABA'

The New York Stock Exchange won the coveted listing of Chinese Internet giant Alibaba Group Holding Ltd., extending its streak of landing technology IPOs at the expense of rival Nasdaq OMX Group, Inc.

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Alibaba's initial public offering is being planned for the first half of August, though the timing isn't set in stone. The offering could raise $20 billion or more, making it one of the largest ever. Alibaba will list on the NYSE under the trading symbol "BABA," according to updated offering documents filed with U.S. regulators.

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Alibaba, an online retailer combining elements of American companies such as eBay Inc. EBAY +0.97% and Amazon.com, Inc., has been increasing its presence in China's financial sector. The Alipay electronic-payment system for e-commerce transactions has expanded into lending and financial products that allow Alipay users to invest in a money-market fund.

http://online.wsj.com/articles/aliba...nge-1403802203

Alibaba Plans IPO for After Labor Day

Chinese E-Commerce Giant Plans Robust 'Roadshow' to Pitch Deal

Investors will have to wait a little longer for a chance to buy into the year's most-anticipated initial public offering.

Alibaba Group Holding Ltd. on Thursday decided to push back its IPO — which could raise more than $20 billion — until after the Sept. 1 Labor Day holiday.

Leaders of the Chinese e-commerce giant, including founder and executive chairman Jack Ma, and their bankers worried there wasn't enough time to complete all the needed steps for the deal before their preferred launch date at the end of this month, according to people with knowledge of the decision.

Alibaba's timing was always aggressive. The company was hoping to launch one of the biggest-ever IPOs less than three months after filing official documents for the offering. Many issues remained unresolved, including which existing investors will sell their shares as part of the deal, the people said. Discussions with current shareholders became more complicated after longtime shareholder Yahoo Inc. said this week it would sell a smaller stake than earlier announced, the people added.

Bankers are also far away from putting a firm value on the company and setting a potential price range for the shares, people familiar with the transaction said. In addition, Alibaba is considering including second-quarter earnings as part of its IPO prospectus, and would require a full audit of those results, they said.

Meanwhile, acquisitions and other business announcements slowed the process of writing IPO documents and took the attention of senior managers, people familiar with the deal said. This week, Alibaba announced a partnership with Lions Gate Entertainment Corp., and recently has taken stakes in companies including a Web browser and a Chinese soccer team.

The company still is in discussions with the U.S. Securities and Exchange Commission over completing its IPO paperwork, people familiar with the matter said. It anticipates receiving additional comments next week, though it isn't yet clear if those will be the final queries, the people said. The deal can't launch without the agency's blessing.

IPOs can take about two weeks from when they launch to when shares start trading and the company had hoped to wrap up the process by mid-August. The concern, the people said, was that a small delay in the next couple of weeks would push the share sale into late August, when many investors take vacations.

One factor that gave the company comfort in its decision to wait was the muted market reaction to testimony this week from Federal Reserve Chairwoman Janet Yellen, people familiar with the deal said. The worry had been that she could spook markets by advocating tighter monetary policy, but her comments didn't give that impression. The market reaction left Alibaba and its bankers less fearful about a stock pullback going into the fall, the people said.

The six banks selling the company's shares are Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., J.P. Morgan Chase, Morgan Stanley and Citigroup Inc. Rothschild also is advising the company and working with the banks.

Though Alibaba has attracted global investor interest, the process of selling more than $20 billion of shares isn't easy. Many outside events—such as violence in the Middle East or a sudden U.S. market plunge—could complicate the deal. The launch work involves people on three continents, including at the seven investment banks and five outside law firms.

Alibaba is planning on a robust "roadshow" of face-to-face meetings with investors to pitch the deal, with visits to Hong Kong, New York and London, and possibly Singapore and other cities in the U.S., people familiar with its plans have said. The company has wanted to ensure that top decision makers at investment firms would participate in the process and not be on vacation, they said.

"If you this give the company the proper amount of time to finalize its roadshow story and filing documents, investors may see that for the better," said Chaith Kondragunta, chief executive of research firm AnalytixInsight Inc. Mr. Kondragunta has estimated that public markets could value Alibaba as highly as $230 billion, even though the company itself has estimated that it is now worth $130 billion.

The delay likely will ripple through the U.S. listing market.

A number of technology companies, including Chinese firms, had been planning to launch their deals a few days after Alibaba's IPO, hoping that it has a strong trading debut and sparks demand for more deals, according to bankers. Those IPOs now likely won't kick off until late September, they added.

Alibaba IPO Price Range Said Likely to Rise

Alibaba Group Holding Ltd. is likely to raise the price range of its U.S. initial public offering because of buoyant demand for the deal, people familiar with the situation said Monday.

It wasn't immediately clear what the new price range would be, but Alibaba would likely release the information in a filing with the U.S. Securities and Exchange Commission, they said.

Alibaba is seeking as much as US$24 billion in what could be the world's biggest ever IPO. The Chinese e-commerce major started the Asia leg of its roadshow Monday and is currently selling shares to investors in a range of US$60-US$66 apiece.

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Alibaba and its bankers have decided to close order books Tuesday for some U.S. investors and Wednesday for investors based in Asia and Europe, people familiar with the situation said earlier. However, investors in any country who haven't yet had their scheduled meeting with the company on its global roadshow will still be able to place orders once they have, the people added.

Alibaba plans to set a final price for the shares Thursday, with trading to begin in New York the following day.

Alibaba's IPO Priced at $68 a Share

The $21.8 Billion Offering by the Chinese E-Commerce Giant Is Among the Biggest Ever

Alibaba Group Holding Ltd. 's shares priced Thursday at $68, at the high end of expectations, in what is one of the world's largest initial public offerings ever.

The deal raised $21.8 billion, to be split among the Chinese e-commerce behemoth, its executives and early investors. The total comes close to the previous record of $22 billion raised by Agricultural Bank of China Ltd. in 2010.

Risks, though, exist. Alibaba has a complex corporate structure and unusual governance. In addition, it faces tough competition from heavyweights like Tencent Holdings Ltd. in China, as well as potentially Amazon.com Inc. and eBay Inc. in the U.S.

Still, Alibaba's IPO price values the whole company at $168 billion, making it instantly one of the largest listed in the U.S. and giving it a larger market capitalization than Amazon, which is at about $150 billion.

The stock is poised to start trading Friday on the New York Stock Exchange under the symbol BABA. Alibaba decided to list its shares in New York instead of Hong Kong because regulations in the Asian hub prevent the company's founding partners from maintaining control of the board.

According to recent readings, Alibaba controls 80% of China's e-commerce market. The company's Taobao and Tmall marketplaces handled $248 billion in online transactions last year, which is more than Amazon and eBay had combined.

The company's momentum has continued. Last month, Alibaba posted a 46% jump in revenue for its most recent quarter, helped along by an increase in revenue and transactions derived from mobile users. The company also is far more profitable than many of its American Internet counterparts, generating 43% operating profit margins in the second quarter. In comparison, Amazon had a 0% operating margin.

Details of Alibaba IPO Trickle Out

1,700 Investors Put in Orders; About Half Got No Stock

Investors on Friday morning started to hear about how much Alibaba Group Holding Ltd. stock they were sold in the company's initial public offering.

The answer most are getting: Not much.

Over 1,700 investors world-wide put in orders for Alibaba shares, according to people familiar with the matter. About half of them got no stock, the people said. A majority of the shares were sold to U.S. investors, they said.

Meanwhile, 25 investment firms were sold about half of the stock in the IPO, people familiar with the deal said. That is unusually concentrated for a deal of this size, said a banker familiar with the process.

Around 7:30 a.m. New York time Friday, bankers started confirming allocations with investors, a necessary step before the shares can open on the New York Stock Exchange, people familiar with the process said.

The company's management urged the banks to give the most stock possible to investors with whom the company already had a relationship, including early investors and the types of investors likely to hold stocks for a long time, the people added.

After the Chinese e-commerce giant sold $21.8 billion worth of shares last night, in what could prove become the biggest IPO of all time, attention now turns to the stock's opening trades on the New York Stock Exchange later this morning.

Alibaba Initial Indications Point to $80 to $83 Open; 30M Share Initial Volume

CNBC’s Bob Pisani just reported from the floor of the New York Stock Exchange that the order book for Alibaba Group Holding’s (BABA) IPO is indicated to possibly open in a range of $80 to $83, well above the $68 price set last night.

The market makers at NYSE tells Pisani the initial order volume is 30 million shares.

NYSE is still in no rush to open trading. Representatives reiterated that they don’t know yet what time the open will be.

Latest data from Ameritrade: Demand for Alibaba shares is running about 3x Twitter and about 70 percent of what it saw for Facebook.

NYSE's Cutler: Likely to open within or near range of $90-91, no firm ETA

Alibaba Shares Seen Heading for Big Gains Once Trading Starts

Signs Point to Sharply Higher Stock Prices after IPO

Over 1,700 investment firms world-wide put in orders for Alibaba shares, according to people familiar with the matter. About half of them got no stock, and many others got less than 5% of what they asked for, the people said.

Some 25 investment firms were sold about half of the stock in the IPO, people familiar with the deal said. That's unusually concentrated for a deal of this size, said a banker familiar with the process.

That heavy concentration could impact its first-day gains as bankers get set to open trading New York Stock Exchange on Friday morning.

The stock would struggle to hold the anticipated opening price if big investment firms, satisfied with their allocations, now have less incentive to buy, and smaller investors opt to simply flip their small holdings rather than try to build larger positions.

Or, it could be boosted if the investors who got small allocations opt to buy more on the open market to build sizable positions for their portfolio, and if institutions continue to seek even more stock.

Even big institutions didn't receive all they asked for, with some receiving less than a quarter of their requests, people familiar with their thinking said.