Until this week, few Americans — outside of tech and investment circles — were overly familiar with Alibaba. But the Chinese company is fast becoming a household name as it prepares to launch an initial public offering that may be the largest in U.S. history.
Alibaba Group Holding Ltd. was founded in 1999 by flamboyant entrepreneur Jack Ma, who last week celebrated his 50th birthday. Think of it as Amazon, eBay and PayPal rolled into one. Alibaba.com connects buyers and sellers of industrial and commercial goods and services in China. Its Taobao unit is the country’s largest online shopping portal, and its Tmall group is China’s biggest business-to-consumer platform.
In the second quarter, Alibaba posted revenue of $2.5 billion, up 46 percent from the previous year.
So why does Ma want to become answerable to a board of directors, regulators, and, ultimately shareholders by going public with an IPO slated for Friday? Alibaba’s filings with the U.S. Securities and Exchange Commission shed little light on his motivations.
“We plan to use the net proceeds from this offering for general corporate purposes,” Alibaba said in boilerplate language included in its F-1 registration document.
But clues to Ma’s goals can be gleaned from his past statements, from sources close to the company, and a look at Alibaba’s future opportunities — and current weaknesses.
Here are five reasons why Alibaba may be about to launch an IPO that analysts estimate could raise as much as $20 billion to $25 billion:
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