Will Alibaba IPO be the biggest in the world?

Chinese e-commerce giant, Alibaba Group Holding or Alibaba Group is coming out with an IPO (initial public offering) that will create world record.

Alibaba is planning to raise $19.21 billion (at $60 per ADS) – $21.13 billion (at $66 per ADS), by selling more than 320 million ADS (American Depositary Shares). The company is planning to sell more than 123 million ADS, and the shareholders including Yahoo, abd promoters Jack Ma and Joe Tsai are offering additional 197 million ADS.

Alibaba Group will be the biggest IPO in the US and will surpass Visa which raised $17.9 billion in 2008. The ADS has been approved for listing on the New York Stock Exchange under the symbol “BABA.”

Alibaba Group can also beat the world’s biggest IPO, Agriculture Bank of China which raised $22.1 billion in 2010. At $66 per ADS, Alibaba can raise $21.13 billion through 320 milion ADS and the underwriters have the right to purchase up to an aggregate of 48 million additional shares which will take the overall tally to $24.3 billion, making a new record worldwide for creating the biggest IPO in the world.

In terms of market cap, it is expected Alibaba Group’s market cap will be around $163 billion at $66 per ADS surpassing Amazon, world’s No 1 e-commerce company with a market cap of $155 million.

“In the past decade, we measured ourselves by how much we changed China. In the future, we will be judged by how much progress we bring to the world. This challenge is enormous, but it is also a blessing to have this rare opportunity. This challenge requires us to do our best day-to-day, but most importantly it requires us to think about what is best over the long-term,” said Jack Ma, executive chairman, Alibaba Group Holding.

Alibaba group plans to use the net proceeds from IPO for general corporate purposes. The company plans to invest net proceeds in short-term, interest bearing, debt instruments or bank deposits. The company currently intend to use the net proceeds from this offering outside of China.

Alibaba group started by enabling small businesses to grow by solving their problems through Internet technology and leveraging innovation to grow and compete more effectively in the domestic and global economies. Since 1999, Alibaba has helped millions of small businesses to achieve a brighter future.

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