Alibaba Floatation on NYSE Looks to Eclipse Previous IPO Record
Chinese online retailer Alibaba Group Holding is set to bring an end to its two-week initial public offering (IPO) roadshow, finally pricing its shares in what may well be the largest ever listing.
The decision is set to be made after stock markets
in the US close at 4:00pm local time and the company will begin trading on the New York Stock Exchange tomorrow, using the ticker 'BABA'.
Interest in the IPO has been mounting over the course of the roadshow, which was kicked off last week by Alibaba
executives including Co-Founder and Executive Chairman Jack Ma.
Amid the fervour, the company, which handles more transactions than Amazon and eBay combined, lifted its pricing range to between $66 and $68 per share.
If the top end of that range is achieved, the IPO would raise just under $22 billion (£13.5 billion).
However, underwriters have the option to sell even more shares and if this is exercised, Alibaba's market debut would likely eclipse the current largest on record, Agricultural Bank of China's $22.1 billion listing in 2010.
'Long-Term Growth Potential'
In a research note accompanying a 'buy' rating, CRT Capital Analyst Neil Doshi said the pricing range stated 'significantly undervalues the long-term growth potential of the company'.
The retailer was launched by Mr Ma in his one-bedroom apartment 15 years ago and has since come to account for four-fifths of all online commerce conducted in China, as well as branching out into the fields of e-payment and financial investment.
However, the company's complex governance structure and Mr Ma's outside investments have sparked concerns regarding potential conflicts of interest and investors' ability to influence Alibaba's strategy moving forward.
It is being listed in New York because the Hong Kong stock exchange refused to allow a small designation of company officials to nominate the majority of the board.
Multiple share classes with different voting privileges are not permitted by Hong Kong Exchanges and Clearing, though it is considering loosening these rules.
The information and comments provided herein under no circumstances are to be considered an offer or solicitation to invest and nothing herein should be construed as investment advice. The information provided is believed to be accurate at the date the information is produced.
By Jonathan Sudaria, 18 September 2014