Company to Get More Acquisitions after Initial Public Offering
Alibaba Group Holdings is planning to use proceeds from a potential initial public offering to fund any acquisitions as the company looks forward to broaden their mobile services. The company will not include some of its financial businesses such as their micro loan services and Alipay their online payment platform.
As of the moment Alibaba has not officially announced their plan to hold and IPO but investors are already familiar with the matter as the company has already intensified meetings with investment banks in the past weeks. The issue will value Alibaba around US$60-100 billion making it the world’s biggest Internet IPO which is a much sought after prize among bankers and stock exchanges. Alibaba’s listing will depend on whether the company will have a good acquisition target. Last May Alibaba paid US$ 294 million in buying a 28 percent stake in the Chinese digital mapping company AutoNavi, and have also invested US$ 586 million in buying an 18 percent stake in Sina Corp.’s Weibo business.
Alibaba’s revenue mostly comes from their e-commerce platforms Taobao and it will be the only profitable business to be sold in the IPO. Based on a regulatory filing by major stockholder Yahoo Inc., showed that the company posted a 171 percent jump in net profit in the fourth quarter raising its revenue 84 percent or US$ 642 million.
Last year, Alibaba split Taobao into three units namely the Taobao Marketplace, Taobao Mall and eTao.