Alibaba Allows Investors a Closer Look to U.S. Initial Public Offering
In a first step of what analysts consider as the largest technology debut in the history, Alibaba have allowed investors a closer look in the scale and growth of the e-commerce company in a initial public offering that was filed yesterday. Alibaba Group Holdings Ltd. powers 80 percent of all their online commerce in China is raising US$ 15 billion and could even top the 16 billion that was pulled by Facebook during its listing in 2012.
The majority of the proceeds will go to Yahoo Inc. who bought 40 percent stake in Alibaba in 2005 for around US$ 1 billion and must sell more than a third of their current stake of 22.6 percent through the initial public offering. Alibaba will also be selling new shares to build up a cash chest that was depleted by a rash of recent acquisitions. Although Alibaba is a lesser known brand known in the US than the Internet companies such as Facebook and Amazon, the company has stirred the interest in the Silicon Valley and Wall Street since the entry of Facebook. The offering will make Alibaba the largest Chinese company to be listed in the United States.
Alibaba controlled more than 1.5 trillion yuan of transaction for 231 million active users across three of its main Chinese online marketplaces in 2013, which is more than eBay and Amazon combined. The company has the ability to transport that kind of power outside of China andhas the potential to be a true global e-commerce powerhouse.
Founded in one room apartment 15 years ago, Alibaba is controlled by a 28 member partnership in which they have exclusive rights to nominate a simple majority of its members into a board of directors just after its initial public offering. Alibaba also operate a online messaging service and a cloud computing business although 80 percent of the company’s revenue comes from Tmall, Taobao and Juhuasuan online market places.