Chinese e-commerce titan Alibaba last night priced its initial public offering at the top end of expectations, lining it up to raise a colossal $21.8bn (£13.3bn) in what will be the biggest tech float in history today.
Alibaba will price its shares at $68 on the New York Stock Exchange, giving the firm a historic opening market valuation of $167.6bn.
The float is set not only to be the biggest ever of any company listing in the US, but also could be the single largest initial public offering (IPO) ever if its underwriters decide to sell additional shares.
Alibaba is responsible for 80 per cent of online sales in the world’s second largest economy, handling more transactions than Amazon and eBay combined and generating $8.46bn in the last year to March.
The Agricultural Bank of China currently holds the record of the biggest float ever raising $22.1bn from the public markets in 2010. However, if Alibaba’s 35 underwriters, including Goldman Sachs, JP Morgan, Morgan Stanley and Citigroup, decide to offload further stock this figure could spiral to $25bn.
Founder Jack Ma, who started the company with $60,000 from his one-bedroom apartment, will have a paper fortune worth some $14bn, vaulting him into the ranks of tech billionaires like Bill Gates and Jeff Bezos.
Yahoo, which owns a 24 per cent stake in Alibaba, is selling some $8bn worth of stock in the offering, leaving it with a 16.3 per cent stake.
While today’s float is expected to see shares pop between 10 and 15 per cent, some market watchers have advised caution over the firm’s corporate governance structure.
“27 individuals... known as the partnership… have the authority to control the majority of board appointments. This means that they will be entitled to appoint who they want without the need for any additional shareholder approval,” warns Institute of Directors corporate governance adviser Oliver Parry writing in The Forum in City A.M. today.
Bank of America Merrill Lynch, UBS and Barclays are notably absent from the lineup of underwriters on the listing, due in part because they are working on the upcoming IPO of competing Chinese internet retailer JD.com.