Chinese e-commerce giant Alibaba Group said Sunday it will go public in the United States, ending months of speculation about where it would launch its initial public offering. The company initially considered a deal in Hong Kong. The IPO could bring in as much as $15 billion dollars, which would be the biggest IPO since Facebook (FB) went public in May of 2012.
Alibaba says more than $150 billion worth of merchandise changes hands on its sites each year, which would be more than Amazon and eBay combined. At least six investment banks are involved in the deal. According to The Wall Street Journal, the company plans to give equal billing to Credit Suisse, Deutsche Bank (DB), Goldman Sachs (GS), J.P. Morgan Chase (JPM) and Morgan Stanley (MS) as co-lead underwriters of the IPO. Citigroup (C) also will have a role. Yahoo (YHOO) owns a 24% stake in the company.
“They’re essentially like Amazon.com, like PayPal and like eBay and a little bit of Google all rolled into one in China,” said Yahoo Finance Editor in Chief Aaron Task, who said he owns Yahoo stock. “They are just an immense player in the dot com space in China and this deal is going to be huge.”
Alibaba did not specify timing for the offering or which U.S. stock exchange would list the company’s shares.
Another Chinese internet company is also moving ahead with a U.S. IPO. Sina’s (SINA) Weibo unit filed for its IPO Friday. The Twitter-like messaging service is looking to raise $500 million in the offering, which will be managed by Goldman Sachs and Credit Suisse. In its filing, the company lists Chinese government censorship as one of its risk factors. Weibo was founded in 2009 and has a user-base about half the size of Twitter's.
Speaking of Twitter (TWTR), the company's CEO Dick Costolo arrives in Shanghai today for his first visit to China. Twitter and other social media sites have been mostly banned in China since 2009. Costolo has said he would love to be able to "run Twitter as Twitter" in China, but wouldn't sacrifice the principles of the platform in order to do so. In our poll today, should American social media companies expand into China even with censorship in place? Cast your vote and post your comments as well.
- Investment & Company Information
- Alibaba Group
- initial public offering
- Goldman Sachs