Alibaba IPO Price Estimates: Biggest E-Commerce Company's Position in Latin America as IPO Set to Break Facebook's Record
The world's largest e-commerce company is reportedly set to make the biggest initial public offering in U.S. history. Alibaba Group Holding Ltd., based in China, filed the paperwork with the Securities and Exchange Commission on May 6, and it could raise up to $1 billion.
According to CNN, the New York Stock Exchange (NYSE) and Nasdaq are competing for Alibaba's presence on their exchange. Alibaba, said to be a mixture of Amazon.com, eBay, and Google rolled into one company, earned a net income of approximately $1.4 billion in 2013 on $5.6 billion in revenue courtesy of 231 million active buyers.
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Although the company listed it could raise $1 billion on the IPO, analysts have projected the final figure to be a lot higher. The IPO could surpass Facebook's record of $16.4 billion raised in 2012. Alibaba's F-1 document showed the company plans to sell about 12 percent of its shares.
In regards to Alibaba's role with Latin America, the company had apparently voiced their intentions on entering the region's market but noted potential problems the company might encounter. According to Alibaba Chairman Jack Ma in 2008, via Spanish news agency EFE, a trip to Peru was scheduled and could help "gather feelings" on conducting business in Latin America. In 2013, The Economist noted markets such as Latin America can be "the most promising" for Alibaba due to due to "low-trust, underbanked emerging economies."
A problem for Alibaba in Latin America is "there are not many people in China who speak Spanish well," said the company's chairman. He did recognize the region being an "enormous market" due to small and medium-sized businesses.
Alibaba's website also allows users to feature a showcase with "Latin America" based suppliers and manufacturers. A few products listed include "Latin America style leopard golden lotus girls' evening dress/women dress," "Green Arabica Coffee Bean from Latin America - High and Low Quality," and "Travel Adaptor Plug: Worldwide / European Visitor to UK from Europe, USA, Australia, China & Latin America," to name a few.
Alibaba has since launched a Spanish-language version of their website.
A major player in Alibaba's presence in the U.S. is Yahoo, which owns a 24 percent stake in the company.
"Depending on the price of the deal, Yahoo most likely will receive $10 billion to $15 billion for the 9 percent stake in the Chinese e-commerce company that it is required to sell in the offering," wrote Vindu Goel in The New York Times.
Alibaba was created in 1999 by 18 people. Led by former English teacher Ma, the company's mission was to "level the playing field" by aiding small enterprises to influence their innovation and technology in order to grow and compete "more effectively" across domestic and international economies.
"Our platform and the role we play in connecting buyers and sellers and making it possible for them to do business anytime and anywhere is at the nexus of this ecosystem. Much of our effort, our time and our energy is spent on initiatives that are for the greater good of the ecosystem and the various participants in it," Alibaba stated in its SEC F-1 filing.
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For the latest updates, follow Latin Post's Michael Oleaga on Twitter: @EditorMikeO or contact via email: m.oleaga@latinpost.com.
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