Alibaba: On the IPO Track?

by Tom Taulli | January 16, 2013 11:43 am

Founded about 14 years ago, Alibaba is still a privately held company. But that may change this year. According to Bloomberg[1], it looks like the giant Chinese e-commerce company has hired Credit Suisse (NYSE:CS[2]) and Goldman Sachs (NYSE:GS[3]) as lead investment bankers.

If there is an IPO, it will likely be on the Hong Kong exchange and could result in a capital raise of $3 billion to $4 billion, giving Alibaba a market cap over $40 billion. Yes, it would be in the Internet big leagues with companies like eBay (NASDAQ:EBAY[4]) and Facebook (NASDAQ:FB[5]).

Signs of IPO preparation are already popping up at Alibaba. Just yesterday, co-founder and CEO Jack Ma announced he will step down in early May[6] (he’ll take the role of executive chairman). It looks like he wants to bolster the senior management team.

The timing for a deal also appears good. Keep in mind that the Hang Seng index is up about 22% over the past six months. Besides, Alibaba is a top brand in China and has assets that span mega-markets like e-commerce, auctions and online payments. In fact, for the first nine months of 2012, revenues surged by 74% to $2.9 billion, and profits more than tripled to $781.7 million.

An IPO would also be good news for Yahoo (NASDAQ:YHOO[7]), which has a 20% stake in Alibaba. Perhaps this is one reason Yahoo’s shares have been rising lately, up 27% over the past six months.

Tom Taulli runs the InvestorPlace blog IPO Playbook[8], a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook[9]” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders[10].” Follow him on Twitter at @ttaulli[11]. As of this writing, he did not hold a position in any of the aforementioned securities.

  1. Bloomberg:
  2. CS:
  3. GS:
  4. EBAY:
  5. FB:
  6. announced he will step down in early May:
  7. YHOO:
  8. IPO Playbook:
  9. How to Create the Next Facebook:
  10. High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders:
  11. @ttaulli:

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