Chinese e-commerce and media giant Alibaba Group priced its initial public offering Thursday at $68 per share, set to raise about $21.8 billion in what would mark the biggest U.S. IPO ever, per multiple reports.
The IPO values the company at close to $170 billion. Alibaba shares are set to begin trading Friday under the symbol “BABA” on the New York Stock Exchange.
Founded in 1999, Alibaba lays claim to being the biggest e-commerce company in the world. Most of its revenue comes from two main websites: Taobao, a consumer-focused e-commerce marketplace, and the business-to-consumer Tmall site. Those together processed $248 billion in online transactions last year, more than Amazon.com and eBay combined.
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As a result of the IPO, Yahoo — Alibaba’s second-biggest shareholder, which has owned 22.5% of the Chinese company’s shares — stands to receive $8.3 billion in cash after selling a portion of its stake. According to reports, Alibaba founder and chairman Jack Ma will rake in approximately $867 million in cash from the IPO after selling 6% of his stake, and with a net worth of more than $13 billion will become one of the world’s wealthiest billionaires.
Alibaba’s profits tripled in the second quarter of 2014, amounting to $2 billion up from $700 million the year prior. Revenue shot up 46% in the period, to $2.54 billion. The company recorded sharp growth in the use of mobile with monthly active mobile users, reaching 188 million, and the proportion of transactions handled (gross merchandise volume) conducted via mobile devices rose 30%, up from 12% a year ago.
The company has aggressive ambitions to expand in the U.S. and elsewhere, while it has also established a solid foothold in the Asian entertainment biz.
Alibaba, together with Jack Ma’s Yunfeng private-equity fund, hold stakes in Huayi Brothers Media, China’s largest private-sector film and TV group, and Media Asia, a mainstay of the Hong Kong movie industry. In addition, Alibaba paid about $1 billion for a minority stake in Wasu Media, the Internet TV group and content arm of cable network giant Wasu, as well as $1.2 billion for an 18.5% stake in China’s online-video market leader, Youku Tudou.
Alibaba’s largest private shareholder is Japan’s SoftBank, which will have a 32% stake in the company following the IPO. SoftBank plans to retain its entire stake of 797.7 million shares.