The world's financial centers are fighting each other for the
right to host Alibaba Group's initial public offering (IPO).
There's no date set yet, although it is widely expected to happen
in the first quarter of 2014. There are no documents that investors
can pore over. There isn't even final word that it's going to
But China's biggest e-commerce site-a privately-held
Chinese-language combo of
), PayPal and more all rolled into one-is interested in selling
shares on an exchange outside mainland China, and everybody wants
Just by doing nothing since 1995,
) has managed to hang onto 24% of the Chinese company. By the terms
of its current agreement, it will be required to sell much of its
stake when and if Alibaba goes public.
Tough luck for Yahoo CEO Marissa Mayer. She has bought a couple of
dozen small sites in the last year, with names like GhostBird and
Bignoggins, as she tries to revive her flagging one-time giant.
She can buy a whole lot more when she cashes in those Alibaba
Yahoo's 24% share might be worth about $36 billion. That's the
estimate from RBC Capital Markets, which this week raised its price
target for Yahoo to $44, from $38, citing the value of Yahoo's
stake in Alibaba.
Analyst Mark Mahaney also raised his estimate of the value of
Yahoo's Alibaba stake to $36 billion, from $26.4 billion.
estimates the value
of Alibaba at $150 billion, up from $110 billion.
This week's reason for enthusiasm about Alibaba Group is the news
that the company would invest about $360 million in the Haier
Haier is a brand known in the US for its appliances. But in China,
Haier also runs a logistics company called Goodaymart that delivers
products, both its own and those of other companies, deep into
Alibaba founder Jack Ma said the joint venture was designed to
create a "platform that will equip
China's manufacturing industry
with enhanced nationwide and global access."
That explanation is a bit vague. Apparently, what Alibaba is
getting for its $360 million is access to Goodaymart's warehouse
space and logistics network to enable more efficient delivery of
merchandise throughout China.
A good distribution network is not incidental to Alibaba Group,
which claims it currently generates about 70% of all package
deliveries in China. Ma has termed China's
current logistics network
Alibaba is doing okay in spite of that problem.
In 2012, it claimed
billion in sales
, more than eBay and Amazon combined. A company executive said
earlier this year that Alibaba expects to triple its transaction
volume to about $490 billion by 2016, overtaking
) as the world's biggest retailer.
By some measures,
, the company is already twice as profitable as
The company's two best-known sites are Tmall.com, a Web storefront
that features the products of about 70,000 global brands, and
Taobao, a massive swap shop for Chinese consumers. It has its own
online payment service, currently used primarily for purchases on
its networks. It also operates a daily deals site on the
(GRPN) model, called Juhuasuan.
On the B-to-B side, the company operates Alibaba.com, a
business-to-business portal that connects Chinese manufacturers
with foreign buyers, and a separate wholesale merchandise site for
small businesses. It is now moving into cloud services.
The upbeat numbers keep pouring in. Alibaba was last in the news on
Nov. 11, when it brought in a record $5.7 billion in one day. It
was the Chinese version of Black Friday, called Singles Day.
But as investor anticipation for the IPO grows, it is by no means
certain that it will land on Wall Street.
The Hong Kong Stock Exchange reportedly is considering bending its
own rules on company management structure in order to permit the
kind of IPO that the founder wants.
South China Morning Post
reported this week
that British Prime Minister David Cameron, in a private meeting,
personally appealed to Ma to launch his IPO in London rather than
New York or Hong Kong. In its public statement, the company
stressed Cameron's interest in Alibaba as a platform for sales of
British goods to Chinese consumers.
News of the Alibaba-Haier partnership sent shares in
Haier Electronics Group
(OTCMKTS:HRELF), a division of Haier Group listed in Hong Kong,
soaring nearly 13%, to about $2.76. That is its highest level since
July 1999. Haier is expected to use some of the funds to expand its
capacity and improve the online integration of its products.
Yahoo stock was up just .21%, to $38.95.
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