Alibaba is in some measures the world's biggest online commerce company. The three main websites of the company, Alibaba.com, Taobao and Tmall, have a user base of hundreds of millions, as the websites host millions of businesses and merchants.
Alibaba is also ready to launch the biggest initial public offering of all time, in an IPO that could generate $24 billion once the company likely begins trading on the New York Stock Exchange by the end of next week.
The record-breaking figure is more surprising considering that only a few people in the United States know of Alibaba, as the company does not have an established presence in the country. Described as a combination of eBay, Amazon and PayPal in China, Alibaba has already started to set foot in the United States with the acquisition of stakes in ride-sharing rivals Uber and Lyft and search engine Quixey.
Last week, Alibaba set the stage for an IPO that would give the company a market valuation of $165 billion, which is about the same as Amazon's $160 billion market valuation but far behind Facebook's $200 billion, Microsoft's $378 billion, Google's $400 billion and Apple's $593 billion values.
However, the money that Alibaba will raise through its IPO may be used by the company to create more value for the company through acquisitions, mergers and research, which could lessen the gap in market values with the leading companies.
The IPO of Alibaba is poised to become the biggest ever in the world. The expected raised amount is up to $24.3 billion, including the money that will be going to the investors and the underwriter banks. The amount will easily topple the previous in the United States held by Visa, when it raised $19.7 billion in its IPO in 2008, and will also surpass the worldwide record set by the Agricultural Bank of China, which raised $22 billion in its IPO in 2010.
The IPO is fitting for a company that tags itself as the "largest online and mobile commerce company in the world" based on gross merchandise volume.
Alibaba was able to generate a gross merchandise volume of $248 billion last year, which is more than double that fo Amazon's at $116.4 billion. Alibaba's gross merchandise volume, in fact, is more than the combined volume of Amazon, eBay, JD.com and Walmart.
As Alibaba's IPO nears, the question remains whether investors from the United States will buy into a company that is still largely unknown to them. The answer lies on whether Alibaba's history is enough for investors to trust their investments in the Chinese e-commerce giant.
