Chinese e-commerce titan Alibaba is widely expected to set the record for biggest tech IPO — and it may file next week.
The Hangzhou, China-based company is expected to file the prospectus for its U.S. IPO next week, reported Reuters, citing anonymous sources. Alibaba could file as soon as Monday.
The IPO will likely surpass $16 billion, which is how much Facebook scooped up in its 2012 IPO. That’s the current record for a technology share sale.
Alibaba posted superb fourth-quarter earnings, catapulting most analysts’ company valuations above the $150 billion line. Net income attributable to ordinary shareholders more than doubled to $1.35 billion for the three-month period ended December, according to a presentation yesterday from Alibaba shareholder Yahoo (it owns 24 percent of the company).
Alibaba is often compared to Amazon, but with so many working parts, it also resembles sections of PayPal and Google. Even as the company branches out into sectors like cloud computing, the biggest slice of its revenue still comes from purchase commissions and advertising; it generated a massive $2.8 billion in net income through September, according to quarterly filings, with revenue in that period amounting to $6.7 billion. Total gross merchandise traded on Alibaba last year was roughly $240 billion, more than double Amazon’s total of around $100 billion.
Alibaba has carried out a spate of deals ahead of its IPO, including a $692 million investment in department store chain Intime Retail Group. It’s looking to stay one step ahead of Shenzhen, China-based rival Tencent Holdings, which has also invested in tech upstarts and more traditional sectors like logistics companies and appliance makers.
Alibaba announced its U.S. IPO exactly a month ago. All the major banks are reportedly jockeying for a leading role in the IPO. At least five — Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, and Morgan Stanley — are expected to work with Alibaba on the IPO.