New York IPO of China’s Alibaba May Expand to $130 Billion

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Courtesy of Alibaba

HONG KONGAlibaba, the Chinese e-commerce and Internet giant, has expanded the size of its imminent IPO in New York.

The company updated the draft prospectus on file with the Securities & Exchange Commission on Friday, and indicated that it might raise as much as $15 billion. It also indicated that its estimation of its own value has grown from $117 billion previously, to $130 billion.

But even that figure may not be its final one. The latest figures are understood to reflect information for employee compensation and may be revised again.

The SEC filing gave some more explanation of the 2011 corporate restructuring that took Alipay, Alibaba’s payment services activity similar to PayPal, out of the group – despite the protestations of Yahoo. The company said Chinese banking regulations would not allow Alipay to have foreign owners.

Yahoo is Alibaba’s second largest shareholder, with 22.5%, after Softbank, which has 34%.

Company founder and chairman, Jack Ma has close to 9%. But the documents show that Ma and 26 colleagues will remain in control of the company and its 9-person board of directors, a partnership structure which caused the flotation to shift away from Hong Kong.

The filing also shed light on the company’s enormous scale, making its recent films and digital entertainment acquisitions look tiny.

The group has gross merchandise value (gross revenue) of $270 billion in the year to December, was capable of processing 254 million purchase orders in a single day, and accounts for 76% of mobile retail business in China.

The recent plunge into entertainment has seen Alibaba pay $1.09 billion for a $16.5% stake in online video platform Youku Tudou; $806 million for a 60% stake in film producer ChinaVision; put up $1.05 billion of loans for minority stake in digital broadcasting group Wasu; and pay $190 million for a 50% stake in Evergrande FC, one of China’s leading soccer teams.

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