Beware – Alibaba IPO is coming

Beware – Alibaba IPO is coming  

The Chinese e-commerce company is aiming to go public in a sale that could raise more than $ 20 billion. Though this is subject to regulatory approval.

“Alibaba”, biggest E-Commerce giant, from China (more than 80% market share in China Ecom), has filed an initial public offering (IPO) prospectus  last week. . This could be the largest technology sector IPO in the history. Though, we have seen a correction in Technology stocks like twitter, facebook etc in US due to high & unsustainable valuation concern, but Alibaba filed with SEC to raise fund. The size of the IPO is approximately $ 1 billion. However, many believe that this will be more than what facebook  raised in the year 2012. Market feel that the IPO could be in the range of $ 16 billion plus.

This is inspiring story from a China

This company was formed by the Jack Ma & 18 of his friend in Hangzhou, China fifteen years ago with an investment of $ 60000. Jack ma is a former school teacher & English translator. Presently, this company is evolved as a dominant player in Ecommance industry across the globe.  The success starts from the site for Small & medium Enterprise (SME) to provide a platform. They have constantly grown business despite having intense competition from a big player from us like eBay, Amazon etc.

As per 9 month ending December 2013, it had revenue of $6.5 billion and profit of $ 2.8 billion. However, 72% of the revenue comes from China itself. Its revenue surged 57% in this period beating Google, Facebook and Twitter. Presently, Yahoo bought around 40% stake in the year 2005 for around $ 1 billion presently own around 24% stake in this company.

 

Parameter Oct Dec YoY
Revenue 1840 3058 66
Net Profit 650 1364 110

Many analysts are expecting a valuation of $ 200 billion once it is listed. The IPO is expected to come at a time when there is valuation concern in various technology sector stocks like Twitter, LinkedIn , Amazon etc. So other competitors  should be “beware – Alibaba IPO is coming” soon.

 

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