Alibaba could file for U.S. IPO as early as next week

Chinese e-commerce company will likely surpass the $16 billion Facebook raised in 2012

Financial trends and news by Steven Loeb
April 16, 2014
Short URL: http://vator.tv/n/3658

Alibaba's is coming to the U.S. market, and it is coming quickly.

The Chinese e-commerce company, which declared its intentions to file for an initial public offering on the U.S. markets almost exactly one month ago, is expected to have a monster IPO. It could even wind up even besting even the $16 billion raised by Facebook in 2012.

I hope you're ready because now it looks like that process could be starting as early as next week.

Alibaba's IPO filing could come as early as this coming Monday, the 21st, according to a report out from Reuters on Wednesday. 

The timing of that could not be better for the company. 

On Tuesday, Yahoo revealed, in its first quarter earnings report that, between October and December 2013, Alibaba generated $3.06 billion in revenue. That is a 66% increase over the same quarter in 2012, when the company saw $1.84 billion in revenue. Net income increased a whopping 110% to $1.4 billion from $650 million in the same quarter the year before.

These numbers have caused a spike in the company's valuations. Sameet Sinha, an analyst with B. Riley & Co., raised his is valuation on Alibaba to $180 billion from $130 billion, while Bernstein's Carlos Kirjner i s now valuing the company at $245 billion.

That would make Alibaba the ninth biggest U.S.-listed company in the S&P 500.

So, yeah, this thing is going to be huge. And Alibaba has not simply been relying on its impressive growth to woo investors; it has been making moves to make itself even more attractive by diversifying its holdings as well, branching out beyond e-commerce to multiple other sectors. 

The company made four investments in five weeks. In mid-March, Alibaba spent $215 million in mobile video chat app Tango. In late March the company spent $692 million for a 25% stake in Chinese department store operator Intime. The biggest investment that Alibaba made was 6.54 billion Yuan ($1.05 billion) for a 20% stake in Chinese Internet TV company Wasu Media Holding earlier this month.

That was also Alibaba's second investment in digital content, after it bought a controlling stake in ChinaVision Media Group for $804 million early last month. 

Founded in 1999, Alibaba hosts a group of e-commerce businesses. They include a shopping search engine, B2B online web portals, data-centric cloud computing services, and online retail and payment services.

The company is so big that in 2012 just two of its portals made 1.1 trillion Yuan, or $170 billion in sales, more than eBay and Amazon combined. Total gross merchandise traded on Alibaba's e-commerce sites last year was $240 billion, the Wall Street Journal. To compare, Amazon made around $100 billion.

Alibaba had originally attempted to list on the Hong Kong Stock Exchange, but ran into trouble with regulators with it tried to have its partners nominate a majority of the board of directors, something that is not allowed under Hong Kong rules.

Chinese IPOs on the U.S. market

When Alibaba does eventually file, it will be following in the footsteps of three other Chinese Internet companies that are also going public on the U.S. markets this year.

First, JD.com online direct sales company filed to raise $1.5 billion in January, and then microblogging service Sina Weibo filed to raise $500 million in March. 

Most recently it was Chinese online cosmetics retailer JuMei that filed for a $400 million IPO last week. 

Obviously Alibaba would eclipse them all.

VatorNews has reached out to Alibaba to confirm the reports on its filing. We will update if we learn more. 

(Image source: mashable.com)

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