Chinese e-commerce giant could be valued higher than Facebook; consumer unit in Huayi Brothers pact

HONG KONG — Alibaba, the Chinese e-commerce giant, is said to be taking its IPO to New York and ditching plans to list in Hong Kong.

Bloomberg reports that talks with the Hong Kong Stock Exchange broke down over issues of a partnership structure, which founder Jack Ma wanted in order to retain management control, but which is not allowed under Hong Kong listing rules.

The company, which was founded in 1999, operates the Alibaba business-to-business marketplace and the more consumer-facing Taobao, as well as the Alipay payment service. Last year Alibaba handled transactions in excess of $170 billion (RMB1.1 trillion) and enjoyed profits of $667 million in the last quarter.

On Monday it was announced that Taobao had pacted with leading movie studio Huayi Brothers Media to sell tickets to the company’s films online. Taobao already sells movie tickets for 800 Chinese theaters and handles voucher sales for a further 1,000.

Analysts have estimated that Alibaba is worth some $120 billion, which would make it roughly the same size as Facebook (currently capitalized at $118 billion) and the world’s third largest internet conglomerate after Google and Amazon.

The company has had cross shareholding with Yahoo since 2005 when it acquired Yahoo China. According to filings this summer Yahoo owns 24% of Alibaba, while Japan’s Softbank Corp. owns 37%. Jack Ma still retains a 7.4% personal stake.

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