Alibaba Confirms Plans To Offer IPO In US

hackingbear writes "China e-commerce giant Alibaba Group confirmed early Sunday that it plans to become a public company in the US. The proposed US IPO, which is expected to raise more than $15 billion, is a bid winning over Hong Kong stock exchange, which had been competing for the offering with US stock exchanges but objected to some of Alibaba's proposed listing terms. Founded in 1999 by former English teacher Jack Ma, the Hangzhou, China company, of which Yahoo owns 24%, provides marketplace platforms that allow merchants to sell goods directly to consumers controlling 80% of Internet e-commerce market in China."

Comments

The group's Board of Directors

[techno-vampire]

I presume that the Alibaba Group has forty directors running it, and that every single one of them has "sticky fingers."

Re:The group's Board of Directors

[SpankiMonki]

LOL...good one. Wish I had a mod point.

In actuality, the Alibaba Group has 28 partners, and they are at the heart of the reason why the HKEx is refusing the IPO.

The listing terms that the HKEx finds objectionable are centered around the proposed structure of the company, which would allow their 28 partners to control a majority of the board - even though they only own around 13 percent of the company.

Apparently, the HKEx regulators still cling to the quaint notion that small investors are important. I guess those HK guys have a thing or two left to learn about how real capitalism works.

Re:The group's Board of Directors

[Anonymous Coward]

I guess those HK guys have a thing or two left to learn about how real capitalism works.

Are you referring to the kind of Capitalism we saw with Facebooks IPO? Stellar example indeed! A model in corruption is not something to boast about.

Re:The group's Board of Directors

[Animats]

The listing terms that the HKEx finds objectionable are centered around the proposed structure of the company, which would allow their 28 partners to control a majority of the board - even though they only own around 13 percent of the company.

Apparently, the HKEx regulators still cling to the quaint notion that small investors are important. I guess those HK guys have a thing or two left to learn about how real capitalism works.

There was a time when the New York Stock Exchange didn't allow that, either. They caved about a decade ago. Now, both Google and Facebook have two class "president for life" stock issues.

Re:The group's Board of Directors

[mutantSushi]

The listing terms that the HKEx finds objectionable are centered around the proposed structure of the company, which would allow their 28 partners to control a majority of the board [reuters.com] - even though they only own around 13 percent of the company. Apparently, the HKEx regulators still cling to the quaint notion that small investors are important. I guess those HK guys have a thing or two left to learn about how real capitalism works.

Non-voting shares are pretty standard in public stock corporations world-wide. Indeed HKEx itself runs such schemes, namely it's OTC Clearing subsidiary: http://en.wikipedia.org/wiki/Hong_Kong_Exchanges_and_Clearing#History

OTC Clearing Hong Kong Limited (OTC Clear) was incorporated as a subsidiary of HKEx in May 2012 for the purpose of acting as the clearing house for OTC derivatives in Hong Kong. Subsequently, HKEx, under the founding member programme, invited 12 financial institutions as founding members of OTC Clear, who in total hold 25 per cent of issued share capital in OTC Clear (in the form of non-voting ordinary shares) whilst HKEx holds the remaining 75 per cent. HKEx continues to hold 100 per cent of the voting ordinary shares of OTC Clear.

Many publicly traded companies listed in HK in fact have 75%+ of shares owned or controlled by one entity, which has the same net effect as non-voting shares, since such an ownership majority can impose it's will regardless. HKEx has intimated that their true concerns revolve around mainland Chinese court procedures not being amenable to minority shareholders, although if they want to push that, that kind of calls into question HKEx's entire raison d'etre. AFAIK, HK courts can still enforce transfers of shares themselves as judgements, and if HKEx is worried about things that go on outside of HK jurisdiction then most companies traded on HKEx shouldn't be listed there. Realistically, HKEx is known for allowing plenty of shady practices that make it a bourse of last resort, and maybe they decided to stand up here just so they have some pretense of respectability.

ebay?

[sharknado]

Well if this gives Ebay a run for its money, I'm all for it.

Alibaba is bigger than Amazon and Ebay combined

[Anonymous Coward]

Alibaba’s portals handled gross sales of $170 billion in 2012–that is more than eBay and Amazon’s gross sales combined..

Alibaba is HUGE. Every US online retailer should be scared. Alibaba has the potential to take them ALL down.

Opions from China

[Anonymous Coward]

Opinions from customers of Alibaba in China are, from what I've heard, that their delivery service leaves a whole lot to be desired. Considering that for growth they'd have to expand outside of China, and compete with Amazon's seemingly unstoppable growth and awesome customer service, with a business model that covers both direct sales and third party listings almost seamlessly, I'd not bet be entirely willing to be on Alibaba. I'd wish them luck, I want someone to compete with Amazon. But I'd not place money on it.

Combined with an exchange, closer to home, losing out for having "objected to some of Alibaba's proposed listing terms." It reminds me a bit too much of The Wolf of Wallstreet. If they're so successful why would they need to raise $15 billion other than for a cash-in?

Re:"provides marketplace platforms"

[Anonymous Coward]

Translation, They have a website.

Yes, in the same sense that Amazon "has a website", except that Alibaba is far bigger than Amazon.

Alibaba and the thieves

[frovingslosh]

I made the error of buying a few items through Alibaba. Everything is either misrepresented, falsely speced, defective or counterfeit. While Alibaba maintains the pretext of settling disputes with the thieves, they always side with the thieves, so much so that the thieves don't even bother to dispute customers claims, they know that Alibaba always sides with them anyway. Avoid buying anything through Alibaba or buy one share of stock, if you can manage to go to the shareholder meeting and try to hold people accountable.

Re:Alibaba and the thieves

[PhrostyMcByte]

I guess it's a bit of a crapshoot if you get a bad seller, but the fact that prices are 1/4rd of what you'd pay to buy something similar domestically is a pretty good lure.

I've ordered twice from Ali Express -- once for a RTL2832 tuner, and once for a mini-Gorillapod knockoff. Both times I received exactly what the page advertised, in perfect condition and they continue to work great today.

Re:Alibaba are fairly business man

[Anonymous Coward]

Alibaba are understand good seller and all for American company and abroad. As Amwerican many buyer I estanblish Alibaba as best.

John R. from America

15 Billion for what?

[Anonymous Coward]

If they IPO in the US they will have to be held accountable to consumer protection laws. Right now the credit card companies are holding the bag for incorrect items delivered, and faulty merchandise. About 1/2 of the Items I have ordered from them have actually arrived and 1/2 were actually the product I ordered. I ordered 16 186500 batteries once and received 64 AA batteries. I charged back the order with my credit card company.

they remove the bad reviews

[frovingslosh]

Bullshit. They remove the bad reviews. Don't take my word for it, read what others say on Reseller Ratings.

My story with Alibaba

[gwstuff]

When Steve Jobs gave his first iPhone demo, I had my doubts when he claimed that you didn't need stylus pens with touch screens. Seeing the frenzy with which people wanted iPhones in the coming months, I decided to make an investment and buying a large quantity of stylus pens, whose price I expected would rise. I approached several vendors on Alibaba. The process was surprisingly smooth - most of the vendors seemed to have communication reps who were nice to talk to/interact with and knew their stuff very well. The prices were insane. I could buy pens that could be purchased for $30 in the US for 10 cents a piece, if I bought then in bulk. For another 5 cents I could brand them, and for another 10 I could customize them. So I ended up buying 100k of them and having them shipped to a warehouse in Philadelphia, where I rented some space out for ~$50/month. My most memorable feeling from this experience was not the profit I made (not that much, it looks like a lot of other people had the same idea as I did...) but realizing how easy it was to get something custom-manufactured half way across the world, have 100s of thousands of pieces hauled across on boats to a few miles from where I live. Something Marco Polo would have marveled at... Alibaba is only the front end to an unbelievable system of proxy manufacturing.

Re:My story with Alibaba

[Belial6]

What I marvel at is how Chinese sellers can manufacture and ship a product from China to anywhere in the US via the USPS cheaper than I can ship the same product to the next city over.

Re:"provides marketplace platforms"

[anubi]

Yup...

This is the arm for the little guy. ; This one is for wholesale business

Its amazing what you can get over there. You can buy anything from a completely assembled product down to every little piece that goes to make one. I am currently looking into having some of my stuff replicated and sold through them.

Re:"provides marketplace platforms"

[Ed Avis]

I don't think market cap is a good measure of size. If it were, then during the dotcom boom various online pet food suppliers, etc, which had barely any assets, employees or customers, would have counted as 'bigger' than more boring companies with a much greater footprint in the real world. Similarly, a large company may head towards bankruptcy and as it does so its market cap heads towards zero. But even if it is sold for a nominal price of one dollar, it is still a big company by any reasonable measure.

Re:Inside China Alibaba is not used

[Anonymous Coward]

Taobao is amazing. You can buy anything there. See people using Taobao, they are really effective, instant messaging directly with the seller drag'n'drop your item in the message, delivery time in many cases is a couple of hours, if you live in one of the big cities. It is a really smooth experience. It beats anything I have seen in the west so far. But of course, if you can't speak Chinese..

Re:"provides marketplace platforms"

[Anonymous Coward]

Ali Express is like Amazon Stores. It has fixed prices and Alibaba handles the payment processing and escrow, the vendor supplies the goods and handles delivery.

Alibaba.com is more like Craigslist, but for large industrial producers to list their wares, often without public pricing.