Alibaba, the world’s largest e-commerce company, is readying itself for what many believe could be one of the largest US IPOs of all time. Realistically, analysts expect the Hangzhou-based internet group to seek approximately $15bn as part of the share sale, which would put the business’s value at somewhere in the region of $150 and $200bn.
Assuming the valuation comes in at the upper limit of analyst expectations, the company would rank second-only to Google in terms of the most valuable internet companies worldwide. As a means for comparison, the world number one is valued at $394bn whereas both Amazon and Facebook are valued at a lesser $172bn.
Realistically, analysts expect the Hangzhou-based internet group to seek approximately $15bn as part of the share sale
‘Alibaba Group has decided to commence the process of an initial public offering in the United States,’ reads a statement released by the company. ‘This will make us a more global company and enhance the company’s transparency, as well as allow the company to continue to pursue our long-term vision and ideals.’
Alibaba’s efforts to extend its presence overseas have long been anticipated by analysts, and come as the internet group last year lost precious market share in China to some of its smaller rivals. The company, therefore, will be hoping that a stronger overseas presence will bump up its international renown and bolster its reputation at home. ‘Should circumstances permit in the future, we will be constructive toward extending our public status in the China capital market in order to share our growth with the people of China’, continued the statement.
London-based market intelligence firm Euromonitor estimates that China’s e-commerce market will be worth over $300bn by 2018, representing a threefold increase on its 2012 equivalent, and owing predominantly to increased smartphone penetration.
A huge number of international firms have made it their mission to penetrate the lucrative Chinese market, and it would appear that the introduction of developed Western players is beginning to spook the internet giant somewhat.
