Alibaba to enter U.S. stock market with $100 bn valuation
E-commerce company Alibaba confirms that it plans to go public in the U.S. stock market with a $100 billion valuation.
On Sunday, March 16, the Chinese company revealed its plans to release its IPO but did not declare a set date. Analysts predict that Alibaba has a value of between $100 billion and $150 billion and expects the company to raise between $15 billion to $20 billion from its IPO. Analysts believe that Alibaba's IPO will be one of the biggest, as well as one of the most anticipated in the technology industry.
Till now Facebook's flotation in 2011 is ranked as the biggest technology IPO, raising $16 billion at a valuation of $104 billion. In 2008, Visa also went public and raised $17.9 billion from its public release.
Reports suggest that Alibaba was under considerable pressure to release its IPO in Hong Kong, which would have boosted the Asian economy. However, if the company offers its stock in the U.S. it will get many benefits. If listed in the U.S., the existing management team of the company will have more power in Alibaba's operations. The U.S. also allows a dual-class share structure, which will let Jack Ma, the executive chairman and the founder of the company, to have more control.
"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," stated Alibaba. "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."
Ma founded Alibaba in 1999 and started working from his home. Now Alibaba is one of the biggest Internet marketplace and serves around 80 million customers. Yahoo own 24 percent shares in Alibaba. Yahoo's share price jumped more than four percent on Monday, March 17, after Alibaba confirmed that it will release its IPO in the U.S. rather than in Hong Kong.
Alibaba has not yet confirmed the name of the banks that will assist the company to go public. However, rumors suggest that the company will hire Credit Suisse, Citigroup, Deutsche Bank, J.P. Morgan, Goldman Sachs Group and Morgan Stanley for the purpose.