Alibaba files in US for what may be biggest tech IPO in history

Alibaba gave investors a closer look at the scale and growth of the Chinese e-commerce giant in an initial public offering (IPO) prospectus filed on Tuesday, the first step in what could be the largest technology debut in history.

Alibaba, which powers 80 per cent of all online commerce in the world's second-largest economy, is expected to raise more than $15 billion, and could top the $16 billion pulled in by Facebook when it listed in 2012.

The bulk of the proceeds will go to Yahoo - which bought a 40 per cent stake in Alibaba in 2005 for $1 billion and which must sell more than a third of its current 22.6 per cent stake through the IPO.

Alibaba also plans to sell new shares, people familiar with the plans have said, to bulk up a cash war chest depleted by a rash of recent acquisitions.

While the Alibaba brand is less well known in the United States than Internet companies such as Amazon. com and Facebook, the Chinese company's listing has stirred the most excitement in Silicon Valley and Wall Street since Facebook's record IPO.

Alibaba will become the largest Chinese corporation to list in the US - on either the New York Stock Exchange or the Nasdaq.

Alibaba will debut later this year in a market where high-flying tech stocks like Twitter and Amazon have fallen in recent weeks in a sell-off that has divided analysts and investors, reviving doubts about soaring tech valuations.

Estimates of Alibaba’s market value have soared in recent months, to even beyond $200 billion, underscoring Wall Street’s eagerness to take a crack at a massive Chinese company with robust growth.

Alibaba handled more than 1.5 trillion yuan - about $248 billion - of transactions for 231 million active users across its three main Chinese online marketplaces in 2013, more than Amazon and eBay combined. It did so with 20,884 full-time workers, fewer than eBay.

“If it’s able to transport that kind of power to outside China, it has the potential to become a true global e-commerce powerhouse,” said Roger Entner, lead analyst and founder of Recon Analytics. “Everybody thought Amazon could do it, but now we have to re-think Amazon in the light of being the most successful company in that field in the US - but not in the world.”

Alibaba did not give any hints in its IPO prospectus about potential plans for the US e-commerce market. Analysts said it was unlikely Alibaba would adopt the model favored by Amazon, which sells goods directly to consumers using a sprawling network of warehouses.

Alibaba, founded 15 years ago in a one-room apartment in Hangzhou and controlled by a 28-member partnership, boasts of building a company that will last “at least 102 years.”

Reuters