IPO Imminent: Who Is Alibaba?

Unless you are closely involved with Chinese business you may wonder who, or what, Alibaba is. No, we are not talking about the Arabian Nights tale here.

Alibaba is actually the name of the fastest growing e-commerce company in the fastest growing market in the world.

Bigger than Amazon, and bigger than Ebay, the Alibaba Group dwarf these other global giants; last year it processed over $248 billion of online transactions and handled 70% of all packages delivered in that time, all in China.

Led by billionaire internet entrepreneur Jack Ma, who is the main founder and Executive Chairman of Alibaba, the firm will soon launch an initial public offering (IPO) of shares to the public on the New York Stock Exchange (NYSE) to transform the company from a private company to a public one.

The IPO is expected to be one of the largest in history, with some analysts predicting the deal to be more than $20 billion. Bloomberg has estimated that the Hong-Kong headquartered e-commerce firm could be valued as high as $168 billion and will be selling a 12 percent stake in the company through the IPO.

Alibaba’s has listed the ticker ‘BABA’ for the stock market, translating literally to ‘Eight Eight’ in Chinese. Management see the reference to eight as auspicious, and would also prefer having the company’s shares begin trading on August 8 after the IPO is priced the night before, insiders have said.

But there is still a shroud of mystery surrounding the company and its IPO, as many say an August offering would be illogical considering much of the investment banking community will be on holiday during this month.

This cloak of uncertainty, coupled with China’s tempestuous relationship with the outside world, is what is causing so much excitement surrounding Alibaba’s imminent IPO.

Big American technology companies such as Twitter and Facebook could only dream of reaping the rewards of a cash-rich China. Now, the general public can get their hands on a slice of Alibaba and jump on the coattails of its expected aggressive growth in the international market, with the company listed on the NYSE. Open Sesame, as the original Ali Baba would say.