Alibaba Or World Record Of Increased Stock Issuance To IPO

According to people familiar with the matter, Alibaba group is discussing with the investment bank to increase new trading stocks, which will enable the company to raise funds for itself as well as investors' needs.

No final decision is yet to be made, but the increase in new shares will help push Alibaba group IPO to raise more than $20 billion in funds, possibly exceeding the record of the Agricultural Bank of China's US $22 billion 100 million in 2010 when it was listed in Shanghai and Hongkong. In the United States, the largest IPO was Visa Inc's IPO in 2010, when the IPO raised $19 billion 700 million.

A Chinese company will create the largest IPO in the history of the world, which can be seen as another sign that China's importance to global investors is on the rise.

Nevertheless, this is a high stakes for the Alibaba group or Wall Street for IPO. Alibaba's IPO will face global public stock investors. Its underwriting bank, Credit Suisse Group, Deutsche Bank, Goldman Sachs Group, Morgan Stanley, JP Morgan chase and Citigroup, must also take some measures to ensure smooth sales.

According to Dealogic's data, the IPO market in the US has grown at the fastest pace since the age of dot- com this year. But the recent price adjustment of growth stocks has cast a shadow over the market, including some of the companies of Weibo Corp and Locke Holdings Limited, which are priced below their most optimistic forecasts in.

For Alibaba, increasing the new stock will generate additional cash to help the company expand its market outside China and compete with its rich competitors, such as China's Tencent Inc, the US Internet giant Google Corporation and Facebook.

" Alibaba At a turning point, after extreme growth, it will need money to achieve another huge push. " ClearPath Capital Partners partner Paul Boyd said. Boyd also said he would consider buying Alibaba shares for clients.

Selling some of their own stocks allows Alibaba to directly affect the size of the transaction, though it is not the only leverage. Another key factor is how many shares the Alibaba will sell at present, including the Japanese Softbank group holding 37% of Alibaba and the Yahoo Corp holding 24% of Alibaba. Alibaba's IPO is expected to begin in late summer of this year in New York, the United States.

Stock sales directly bring companies and not shareholders, so they are more attractive to new investors, because they can usually be invested in business development.

As of September last year, Alibaba had about $2 billion in short-term assets, although it is unclear how much cash or cash equivalents are. In addition, this figure does not take into account the company's fourth quarter earnings. According to Google Corporation's annual report, it had $59 billion in cash at the end of 2013.

Nonetheless, by creating more Trading stock It is risky for Alibaba to dilute the value of shares held by existing shareholders.

A recent study shows that when a company's share is only a small proportion sold in IPO, investors often benefit from it. Selling fewer stocks often means that the founders, managers and early investors of the company will be more keen on the future performance of stocks. Alan Michel, a professor of management at Boston University, said, "when I want to buy IPO stocks, this is the absolute leading factor I want to consider."

Alibaba employees may also be the sellers of the IPO if they decide to allow them to do so, people familiar with the matter said.

It is not clear whether Alibaba founder Ma Yun (micro-blog) is also the seller of IPO. People familiar with the Alibaba said that by retaining the nomination rights for most members of the board of directors, Ma and a small group of other founders, senior executives and veteran employees plan to maintain some control over the company.

Meanwhile, Alibaba representatives are negotiating with existing shareholders to decide which shareholders will sell shares in the IPO.

Small shareholders, including the US Private Equity Investment Firm Silver Lake, General Atlantic LLC, Singapore Temasek Holdings and China Investment Corp, are expected to sell only a small number of shares or not to sell shares.

Softbank is unlikely to sell any Alibaba. shares 。

Yahoo Corp has agreed to sell about 10% of Alibaba's shares and retain about 14% of the shares.

Another factor affecting the scale of the transaction is the market value of the company. Recently released analysis shows that Alibaba's current market value is between $155 billion and $245 billion, with an average market value of about $160 billion. The current value of Amazon Co is US $155 billion.

Alibaba managers and bankers have not yet decided on the market positioning of Alibaba in IPO. Alibaba expects to formally submit IPO application documents in the next few weeks, but the document is unlikely to determine the size and composition of the IPO.