Alibaba stock priced at US$68 per share

By Luc Olinga

Chinese online retail giant Alibaba has priced its stock at $US68, setting in motion a record-breaking public offering of up to $US25 billion ($NZ29.7 billion).

The company, set to begin trading on Friday on the New York Stock Exchange, priced at the top of the range of $US66-$US68 per share announced earlier this week, according to documents filed with US regulators.

The amount raised by the initial public offering (IPO) would be $US25.02 billion if options are exercised for additional demand, breaking the 2010 record of China's AgBank of $US22.1 billion.

Alibaba founder Jack Ma was expected to ring the opening bell on Wall Street for the market debut, according to persons familiar with the IPO.

Alibaba would have a market value of around $US168 billion based on the price, making it bigger than US rival Amazon.

The IPO allows investors to get a piece of the huge Chinese market, but it also will fuel Alibaba's expansion plans.

Alibaba's consumer services are similar to a mix of those offered by US internet titans eBay, PayPal and Amazon, and it also operates services for wholesalers. It is known for the giant Chinese online marketplace Taobao, among other services.

The company earlier this year announced plans for a US marketplace called 11 Main, which is currently in a test phase.

Alibaba Group made a profit of nearly $US2 billion on revenue of $US2.5 billion in the quarter ending June 30. Revenue rose 46 per cent from the same period a year earlier.

Alibaba decided to list in New York because it wanted an alternative class share structure to give selected minority shareholders extra control over the board; the Hong Kong bourse declined to change its rules to allow this.

The Chinese firm will trade on the New York Stock Exchange under the symbol "BABA".

The IPO is also a major event for US-based Yahoo, which bought a 40 per cent stake in the Chinese online giant in 2005 for $US1 billion and still holds 22.4 percent of Alibaba. The California company is expected to walk away with some $US10 billion paring that stake down to 16.3 percent.


source: newshub archive