Gates and Zuckerberg cash in on Alibaba jackpot

Record-setting stock sale of Chinese e-commerce raises fortunes of rival tech billionaires

Alibaba founder Jack Ma gives a thumbs-up as he arrives to speak to investors at an initial public offering roadshow in Singapore. Photograph: Edgar Su/Reuters

Alibaba founder Jack Ma gives a thumbs-up as he arrives to speak to investors at an initial public offering roadshow in Singapore. Photograph: Edgar Su/Reuters

 

Jack Ma isn’t the only billionaire winner of Alibaba’s initial public offering. The record-setting stock sale also gave a jolt to the fortunes of the world’s wealthiest technology tycoons.

On the day the biggest Chinese e-commerce company raised $21.8 billion in the largest US IPO, the world’s 26 richest tech billionaires from Microsoft’s Bill Gates, Facebook’s Mark Zuckerberg to local competitor Robin Li of Baidu added $3.1 billion of wealth, according to the Bloomberg Billionaires Index.

They added $56.1 billion this year, the most among 14 sectors tracked by the index. Tech stocks globally are rallying ahead of the debut of Alibaba, scheduled today in New York.

Baidu, China’s largest online search engine, jumped 4.3 per cent in US trading yesterday, adding about $680 million to the net worth of its founder Li, the most among Asian billionaires.

“Alibaba is such a visible transaction that everyone got excited,” said Philippe Espinasse, author of IPO: A Global Guide, who used to head equity capital markets for Nomura in Asia. “This is a sentiment rally - whether the sector’s valuation is sustainable depends on the companies’ own merits.”

Mr Gates, the world’s richest person, added $329 million to his $86.5 billion fortune yesterday, while Zuckerberg gained $243 million, according to the Bloomberg. Indian software magnate Azim Premji and Larry Ellison, who stepped down as chief executive of Oracle, increased their wealth by about $400 million. Tencent Rises Shares of Tencent, which is also competing with Alibaba, rose 1.4 per cent to $124.70 at the midday break in Hong Kong, set for the highest close in more than a week.

Alibaba’s Ma emerged as the richest person in China last month, overtaking Tencent chairman Ma Huateng and Baidu’s Li.

Alibaba and its shareholders including Yahoo! sold 320.1 million shares for $68 each, according to a statement, after offering them for $66 to $68 apiece. The sale - which values Alibaba at $167.6 billion - is already the biggest by any company in the US and has the potential to break the global record if additional shares are sold to underwriters.

Not all investors are piling into the IPO. Kevin Headland, director of the portfolio advisory group at Manulife Asset Management in Toronto, whose firm manages $281 billion, said he does not plan to invest right away as it’s “prudent to sit back and evaluate.”

The IPO hasn’t been achieved without setbacks. Alibaba would have preferred to debut in Hong Kong, though listing rules in the city don’t allow its governance structure.

A small group of insiders at Alibaba control the board, the kind of arrangement permitted in the US, where founders of technology companies often maintain control through dual-class shareholdings. Alibaba’s Ma has a net worth estimated at $22.4 billion ahead of Alibaba’s trading, according to the Bloomberg index.

It includes his stake in China’s biggest e-commerce operator, as well as almost half of closely-held parent of Alipay, a company similar to Paypal. Along with Tencent’s Ma and Baidu’s Li, the three are the richest people in China with a combined net worth estimated at about $54 billion.

Bloomberg