Alibaba Group Holding Ltd seeks to raise over $21 billion in an IPO that would value the Chinese e-commerce giant at up to $163 billion, making it the largest-ever technology debut in the US, Reuters reports.
The company, founded by former English schoolteacher Jack Ma, would decide on its final price following a global roadshow that would kick off in New York on Monday, and would be stopping in cities from Hong Kong to San Francisco.
If all goes well, Alibaba might ring the opening bell on the New York Stock Exchange in as little as two weeks.
According to industry analysts, Alibaba would try for a valuation of over $200 billion, ranking the Chinese company among the 20 largest publicly traded companies in the US. It might eventually price above the initial range, should it were to consider investor demand sufficient.
Many investors would like to get a stake in the Chinese company that handles more e-commerce than Amazon.com Inc and eBay combined, Forbes reported.
According to Brian Hamilton, chairman of private company analysis firm Sageworks, the number might seem enormous, but when one looked at the value compared with the company's fundamentals, it was not as rich as we might expect.
However, a number of investors remain cautious about the potential conflicts of interest between Ma's role as a steward of the company, and his investment interests elsewhere.
According to the company, it would sell 320.1 million American depositary shares in its IPO at a price between $60 and $66. Alibaba's current capitalisation is worth more than that of eBay ($68 billion) and Amazon.com ($161 billion) combined at end of trading yesterday.
Founder and chairman Jack Ma could rake in more than $840 million before taxes with the sale of 12.75 million shares at $66 per share in the offering. After the IPO, which is expected later this month, his total holding in Alibaba would still be about 193 million shares-worth $12.76 billion.
Joseph Tsai, Alibaba's vice chairman, stood to net $280 million before taxes through sale of 4.25 million shares. His 3.2 per cent remaining stake following the IPO would be worth over $5.2 billion at $66 per share.
Going by Alibaba's latest earnings report, sales in the second quarter increased 46 per cent to $2.54 billion, and net income nearly tripled to $1.99 billion from the year earlier. The company also recorded robust growth in mobile, where it had fierce competition from Tencent and other Chinese internet companies.