Tomorrow morning Alibaba will list on the New York Stock Exchange, in what could prove to be the biggest IPO in history.
The Chinese e-commerce company has valued its shares at between $66 and $68 – an increased range that would give it a valuation of around $165bn at the midpoint. Analysts believe it could raise as much as $25bn – an unprecedented amount.
Demand appears strong, and an unusual set-up will allow some investors to sell over $8bn worth of shares on the day itself – this is expected to affect how the offering is priced by bankers.
Normally, all of a company's investors are subject to a “lockup” arrangement for several months. Facebook, for example, did not allow any of its pre-IPO shares to be traded when it first listed on NASDAQ.
But in the case of Alibaba, around a third of its shares will be free for trading straight away according to public filings by the company.
Which shareholders will be able to sell stock immediately is not yet clear, but according to the WSJ they are likely to include hedge funds and sovereign-wealth funds.