Alibaba is looking to raise as much as $US21 billion in its U.S. IPO, according to documents filed Friday, making the Chinese e-commerce company's debut one of the largest initial public offerings in U.S. history.
Its stock will be priced between $US60 and $US66 per share, according to a prospectus filed with the U.S. Securities and Exchange Commission. At the top of that range, if Alibaba sells just over 320 million shares as planned, it would bring in just over $21 billion. According to published reports, using the midpoint of that range Alibaba would be valued around $160 billion.
The company is expected to begin its global roadshow in New York City on Monday, when executives will meet with potential investors before moving on to Europe, the Middle East, and Asia. The roadshow is expected to end on September 18 with the pricing of the shares, which would go on sale the following day. Alibaba will trade on the New York Stock Exchange under the symbol "BABA."
Previous IPO documents showed Alibaba sold more merchandise than eBay and Amazon combined. But instead of using its own inventory of goods, as Amazon does, Alibaba manages an online marketplace for connecting merchants with consumers. The company runs the Taobao Marketplace and Tmall, two of China's largest online retail sites. In addition, Alibaba affiliate Alipay is China's largest third-party online payment service.
Alibaba has sold to U.S. customers through its supplier sites AliExpress and Alibaba.com, but the company is looking to expand in this country. It recently launched a new site called 11Main, which currently acts as an invitation-only marketplace offering items from specialty shops for clothing, jewelry and the arts.
One of the company's biggest challenges in the US is that consumers don't know the company well.
"When an Internet company of our scale that originated in China enters the global scene, you should expect that it will encounter skepticism from different directions due to differences in cultural perspectives, values and even geopolitical positioning," said founder and executive chairman Jack Ma, in an accompanying letter to investors.
Yahoo holds roughly a 24 percent stake in Alibaba. But the Internet company will sell roughly 121 million shares in the IPO, according to the prospectus, decreasing Yahoo's ownership to 16 per cent. At $US63 per share, the stock Yahoo is selling would be worth about $US7.62 billion.
Alibaba was formed in 1999 as a way to help small exporters in manufacturing and trading reach global buyers.