Alibaba Group Holding Ltd.’s U.S. IPO, probably the most eagerly awaited listing in the recent times, will price its shares on Sep 18 and begin trading on Sep 19. Alibaba will debut on the New York Stock Exchange (NYSE) under “BABA” ticker.
Alibaba’s filing with the U.S. Securities and Exchange Commission revealed that the Chinese e-Commerce company will offer 320.1 million American depositary shares at a price between $60 and $66 per share. At this price band, Alibaba would be valued at about $160 billion at the mid-point of the range, making it the largest U.S. IPO ever.
Per Wall Street Journal, Alibaba, like other Chinese IPO’s, will hold a program where all employees and other insiders will have an option to purchase shares, before the stock actually debuts on the public market.
Alibaba’s IPO was originally scheduled for Aug 8 which got delayed due to concerns regarding low volume during the slow summer months. This remained a matter of concern for many, especially individual and retail investors. However, investors can now heave a sigh of relief as the Chinese e-Commerce giant rescheduled the IPO date.
Last week, Alibaba chose Barclays PLC (BCS) as the lead underwriter for its IPO. Furthermore, the company has already made agreements with many large U.S. banks, such as Credit Suisse Group, JP Morgan Chase, Citigroup (C), Morgan Stanley, Goldman Sachs, Deutsche Bank AG (DB), as underwriters. Usually, a couple of banks handle IPOs but Alibaba has contracted a lot more which indicates how challenging the proceedings could be.
For most investors, it is no more a secret that Yahoo (YHOO) owns only 22.4% stake in the company while Japan's Softbank Corporation owns nearly 37%. However, most U.S. investors will find it easier to secure Yahoo shares than those of Softbank. Reportedly, Yahoo plans to reduce its stake to 16.3%, following the offering.
CEO Marissa Mayer looks forward to reaping the profits when Alibaba is available for trading but many investors have already started stocking up Yahoo shares in hopes of gaining a share in Alibaba and in turn profit from it.
Yahoo currently has a Zacks Rank #5 (Strong Sell).
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