In what is already being termed as one of the ( or read at is the ) biggest IPOs in the history, Chinese e-commerce giant has finally filed its much anticipated IPO in the U.S.
The IPO, which is expected to fetch Alibaba in excess of what credit card giant VISA and facebook could achieve, was highly anticipated by business centres around the world.
VISA, the credit card giant, currently holds the record of the largest Initial Public Offering at $17.8 billion. It is followed EnelSPA at $16 billion and by Facebook at $16 billion. These numbers could be easily shattered by the IPO filed by China’s Alibaba.
With Alibaba’s IPO filing, Asia, which hasn’t been a major player in the global IT sector, has finally marked a major presence.
The company, which primarily operates in the People’s Republic of China, was estimated by The Economist magazine to have a valuation between $55 billion to more than $120 billion. And this valuation was way back in March 2013.
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.
Also, Alibaba’s IPO will be a major sigh of relief for Yahoo. Yahoo, which bought a 40% stake in Alibaba, a decade ago, is already in profit, largely due to the fact that it bought that share for just $1 billion.
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.