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Alibaba has raised US$21.8-billion ahead of its stock market debut, meaning that it is responsible for the largest IPO in US history.
According to multiple sources, the ecommerce giant, its executives and early investors split some 320-million shares up at a value of US$68 a share.
The value of Alibaba’s IPO puts it well ahead of the US$16-billion Facebook managed to raise in its IPO a couple of years back.
It’s even larger than the US$17.9-billion Visa managed to raise in its 2008 IPO and falls just short of the US$22.1-billion raised by the Agricultural Bank of China in what was the world’s largest ever IPO.
Founded by former English teacher Jack Ma in 1999, the company initially filed to have its stock sold at US$60-US$66 a share, but raised the price following an increase in interest.
The IPO puts Alibaba’s market cap at around US$168-billion, nearly double that of eBay and significantly more than the US$150-billion market cap Amazon currently enjoys.
Since its founding the Alibaba group, which consists of two online shopping sites (Taobao and Tmall) has grown to become the largest ecommerce service in China and one of the largest in the world. It has also diversified its offerings, buying stakes in online video outlets and, at one stage, exploring the potential of building its own mobile operating system.
It has also invested in non-Chinese businesses such as Uber competitor Lyft, Tango and Shoprunner.
Alibaba’s most recent financial report reveals that it generated US$2.54-billion in revenue in the June quarter and brought in US$2-billion in net income. In the same quarter, it had 279-million active buyers and 8.5-million active sellers.
It is widely expected that Alibaba will use the IPO to further expand into the West as it looks to grow its global presence.
As Mashable notes, Alibaba’s IPO should also provide a nice windfall for Yahoo, which owns a 22.5% stake in the company.
The Chinese ecommerce giant will begin trading on the New York Stock Exchange today under the stock ticker “BABA”.