The Alibaba IPO might just raise over $20 billion when it goes public in the United States this month, which would be an all-time record. But could that number climb even higher than that?
That is starting to seem like a strong possibility, at least according to a new report out of the Wall Street Journal on Sunday.
As Alibaba gets set to kick off its its Asia roadshow in Hong Kong on Monday, the company reportedly already has enough demand that it will be able to complete the deal in the $60 to $66 IPO price range it set earlier this month. Demand has been so strong, in fact, that Alibaba has already begun ordering banks to stop taking investment orders from some individual investors.
This has led to questions from investors as to whether Alibaba might do one of two things: either raise the price range, or increase the size of the deal.
The Chinese e-commerce giant is selling 320.1 million American depositary shares, at between $60 and $66 per share, it was revealed in a filing with the Security and Exchange Commission on Friday.
That means that, on the high end, the company could raise up to $21.1 billion in its initial public offering. That would make it the largest IPO in history; even at the low end it would still raise $19.2 billion, easily surpassing Facebook’s $16 billion IPO back in 2012.
It seems likely that the deal will go up, especially since the company is now just starting to court investors in Asia. Alibaba will be hosting a group lunch with institutional investors at the Ritz Carlton hotel on Monday, beginning at 12:30 p.m., according to the Journal. Atending the event will be Chief Executive Jonathan Lu, Executive Vice Chairman Joe Tsai as well as Daniel Zhang, chief operating officer and Maggie Wu, chief financial officer.
The company will host another lunch in Singapore on Tuesday, before setting its final price on Thursday, before shares begin trading on the New York Stock Exchange under the symbol BABA on Friday.
Alibaba is the premiere e-commerce site in China. 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 2013 just two of its portals, Taobao and Tmall, handled $248 billion in transactions, larger than Amazon and eBay combined.
In the most recent quarter, the company saw total revenue of $2.54 billion, with a net income of $1.99 billion. In 2013, Alibaba’s total revenue was $34.5 billion, up from $20 billion in 2012. It’s next income doubled, going from $4.2 billion to $8.4 billion.
VatorNews has reached out to Alibaba for comment, and we will update this story if we learn more.
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