It appears the New York Stock Exchange is likely to get the coveted listing for the Alibaba IPO, according to sources interviewed by the Wall Street Journal. The deal would be one of the largest in U.S. history, with the amount raised estimated at about $15 billion.
And unfortunately for the Nasdaq, it continues a changed narrative of tech offerings slowly moving away from the exchange.
The NYSE has been gaining ground on the tech front for the past few years, landing premium listings such as Pandora (P), Workday (WDAY) and Twitter (TWTR). Much of the momentum shifted away from the Nasdaq following the botched IPO of Facebook (FB), but tech companies have had plenty of reason to gravitate toward the NYSE anyway, such as the NYSE’s history of focus on servicing blue-chip companies.
The WSJ points out that the New York Stock Exchange won’t necessarily get a windfall of fees. Because of Alibaba’s stature, the firm will probably garner a steep discount … but in this case, it’s about reputation and tech cred. And considering how robust the IPO market appears it’ll be this year, the NYSE needs as much ammo as it can get.
The listing also is a major blow to the Hong Kong exchange. Given that Alibaba generates most of its revenues come from China, it seemed like the most reasonable platform for trading, but Alibaba’s partners wanted to remain voting control — something that goes against the HK’s rules.
However, the NYSE listing may be an indication that Alibaba is looking beyond China anyway. The company has already made some acquisitions in the U.S., and having publicly traded stock in the NYSE could hint at more aggressive dealmaking to come.
But one thing is certain: The Alibaba IPO will be massive.
Alibaba is the dominant e-commerce operator in China, bringing in $1.78 billion in revenues (up 51% YOY) in the most recent quarter, which translated to $792 million in profits. Alibaba also has an 18% stake in Weibo, a popular microblogging website in China that also plans to come public in America within the next few months.
It appears a filing could come sometime in April, which would likely put the Alibaba IPO sometime during the summer.
As for underwriters, there appears to be a long list of co-leads. According to the WSJ, prospects include Credit Suisse (CS), Deutsche Bank (DB), Goldman Sachs (GS), JP\Morgan (JPM) and Morgan Stanley (MS).
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.