Alibaba looks set for $100 billion IPO in US after fallout with Hong Kong
Alibaba, the Chinese Internet giant still with a big Yahoo investment, has reportedly given up on going public in Hong Kong and will instead list its shares in America. A likely figure is $100 billion - ten times the anticipated $10 billion for the Twitter IPO.
ALIBABA: $100 billion IPO?
Anonymous sources have told a range of news organisations -- including the Wall Street Journal, New York Times, Reuters, Bloomberg News and USA Today -- that the move would be made after talks broke down overseas.
"We've come to the end of dialogue with Hong Kong and we're pivoting to the U.S. to start the listing process," a company source told Reuters.
Yahoo still owns 24 percent of Alibaba, even after a $7.6 billion deal that sold about half its stake back to the company.
Yahoo! invested $1 billion in Alibaba in 2005 for a 40 percent stake. CEO Marissa Mayer has admitted that the company's stake in Alibaba is a major reason for current stock market enthusiasm for Yahoo!
"There are certainly some smart investment for Yahoo! that I owe to my predecessors. Very notably, Jerry Yang's investment in Alibaba is something that people are very excited about," Mayer said at a conference earlier this month. Yang is Yahoo's co-founder and former CEO.
The biggest IPO currently expected is Twitter is valued at $10.5 billion in private transactions.
Morgan Stanley, Goldman Sachs and Evercore have all predicted that Alibaba could be worth more than $100 billion at IPO time, which would rival Facebook for the highest valuation for a tech firm.
Alibaba's attempt to list on the Hong Kong exchange ran into trouble on the company's demand that its partners decide who sits on the company's board, instead of shareholders. Hong Kong's exchange does not allow dual-class stock structures that give early investors greater power than new stockholders.
The Hong Kong Exchange's CEO said in a long blog post that "as enshrined in our charter, in the event of a conflict, public interest is put ahead of shareholder interest."