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Alibaba IPO Expectations And Hopes

Sep 13 2014

Alibaba screenshot

Alibaba screenshot (Photo credit: Wikipedia)

The Alibaba Holding Group Limited will be landing on the US stock market on September 19th. This corporate behemoth from China began its preparations for the Alibaba IPO yesterday and this is Alibaba IPO that could possible be a record breaker. The preparations included company execs joining forces with bankers to woo potential investors. It is anticipated that the Alibaba IPO will fall within the $60-$66 price range.

This means that the company has the potential to be valued up to $163 billion and would make the company the third largest global Internet firm in terms of market capitalization, behind Google and Facebook. Following this criteria, on September 19th, the Alibaba IPO will put the company in the top 5% of the S&P500.

Following next week's initial public offering, it is anticipated that the Alibaba IPO will be the largest of it's kind in US history. The current record was set by Visa in 2008 with it's $19.7 billion IPO. It is expected that Alibaba will top that with at least a  $21 billion IPO. The Alibaba IPO is not expected to go top $23 billion. If it does reach the $23 billion mark, this will make it the largest in global history, topping the current record of $22.1 billion set by the Agricultural Bank of China. Once it starts trading, its ticker symbol will be BABA.

Because it has a complex company structure, the Alibaba IPO may generate legal fees that  may set another record. It is currently set to pay its lawyers around $15.8 million worth of legal fees, which is 5 times more than the fees that Facebook paid in its high profile IPO.

Despite being a high profile company and a giant in the Chinese e-commerce market, it will not be and has not been an easy job to raise around $20 billion. And it for this reason that companies like Alibaba and companies in general set out to woo investors from around the world. Potential investors ask company representatives questions about investment strategies and the reps ask them how much stock they can buy, especially those investors that can afford to buy large amounts. The investors that Alibaba really wants on board for the Alibaba IPO are those that can purchase $1 billion+ worth of Alibaba stock.

To accomplish the job before the Alibaba IPO, the company is reported to have two teams globe trotting - Team Orange is headed up by Jonathan Lu, the CEO and Joe Tsai, the Vice Chairman. The second team, Team Red, is being led by Maggie Wu (CFO) and Daniel Zhang (COO).

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