The Alibaba Group Holding Limited will have an initial public offering (IPO) on the New York Stock Exchange (NYSE), a recent filing with the Securities and Exchange Commission reveals.
Alibaba is a Chinese e-commerce titan that manages over 80 percent of retail transactions online in the second largest economy in the world that is China. At one point, it recorded 5.75 billion of sales in over 24 hours.
"We are offering American Depositary Shares, or ADSs, and the selling shareholders named in this prospectus are offering ADSs. Each ADS represents ordinary shares, par value US$0.000025 per share," reads Alibaba's filing on June 26, 2014. "We will apply for listing of our ADSs on the New York Stock Exchange under the symbol 'BABA.'"
Research says some market analysts believe Alibaba’s decision to list its IPO in the U.S. is because of a tiff with regulators in Hong Kong who didn’t allow the listing of its shares with a unique partnership structure. Meanwhile, Nasdaq Stock Market and NYSE approved said special structure of Alibaba. They think Alibaba would list its IPO with a dual-class stock structure wherein insiders have varied voting rights over those of ordinary shareholders.
Regardless of the real reason behind the move, Alibaba’s decision to list its IPO on the NYSE is considered a big blow to Nasdaq, where most tech companies, such as Amazon, customarily offer public shares.
Data from Thomson Reuters reveal that Nasdaq generally wins IPOs of tech companies since 1999, but not until 2012 when the NYSE entered the scene and pulled in a draw. In 2013, NYSE stepped ahead of Nasdaq after it won over the public offering of Twitter Inc. Nasdaq, however, has seen wins against the NYSE in the recent years for its blue-chip listings such as Texas Instruments Inc. and Kraft Foods.
Overall, further research indicates the NYSE still leads the competition in the first half of 2014, with $19.8 billion in IPO proceeds or 61 percent of IPO fundraisings in the U.S.
Research says the setback of Nasdaq is somehow because of the notorious mismanagement of Facebook’s market launch in 2012 and of the changes the NYSE applied to its listing standards in 2008, allowing for smaller yet growing firms to qualify. Also, there was a software glitch in Nasdaq that halted trading for three hours in August last year.
Analysts also think Alibaba’s IPO will outdo the initial share offering of Facebook Inc. worth $15 billion in 2012 at the NYSE. The Chinese company’s IPO is being estimated at $200 billion and is expected to be the largest public offering in U.S. history.
