Alibaba to raise $26bn in largest ever IPO
Chinese e-commerce giant Alibaba could be set to raise $26bn in a record-breaking initial public offering, according to a report published by Morning Star, an independent investment researcher.
The report estimates that the company will be valued at a record $220bn, putting the 12 per cent stake reported to be offered at the IPO at around $26bn.
Alibaba is a Chinese company which has taken China by storm. It claims to have 231m active buyers and 8m active sellers trading across its sites and is looking to export its success to the US.
Should the report prove accurate, Alibaba's would be the highest-valued IPO in history pushing Visa's $17.9bn offering into second place and Facebook's $16bn float into third.
The report cited several features that investors could find attractive which ranged from " macroeconomic, socioeconomic, regulatory, and industry catalysts that should translate into an exceptionally long runway for growth" to Alibaba's strong network in the "relatively nascent Chinese e-commerce industry."
The report also noted "strong cash flow prospects based on an exceptionally leverageable business model."
The Wall Street Journal was cautious in its appraisal of the report, which it called "bullish". It also claimed Alibaba's growth forecasts may run into trouble when more transactions are carried out on mobile because it is harder to make money on the small-screen platform.