Alibaba files for IPO in US

Alibaba Chairman and Non-executive Director Jack Ma. [File photo]

China's e-commerce giant Alibaba has filed initial public offering (IPO) document to the U.S. Securities and Exchange Commission (SEC) with plans to raise one billion U.S. dollars, according to SEC information and well-informed sources.

Announcing this in an internal communication to employees, founder and chairman of Alibaba Ma Yun said, "Becoming a listed company has never been our goal. It is a tactic and means to realize our mission."

In its filing Alibaba gave no date for the proposed IPO or whether it would be on the New York Stock Exchange or Nasdaq. It cited its advantageous placement in a nation in which e-commerce is fast becoming a way of life, as Chinese consumers turn to the Internet to buy innumerable items.

Noting that being listed in the United States will expose Alibaba to chanlleges in the global financial market, Ma said,"Not all companies have the opportunities to face such global chanlleges. We are honored to be one of them."

Analysts said the one billion U.S. dollar is only an initial figures and that the actual amount could be much bigger.

Often described as a combination of EBay and Amazon, Alibaba handled $240 billion of merchandise in 2013. With more than 7 million merchants, it has more than $2 billion in revenue and profit of more than $1 billion.

Alibaba's sheer size could weigh on the stock price of US rival Amazon.com if the Chinese company's shares are added to indexes and portfolios targeting e-commerce and related sectors, analysts said.

"Amazon simply doesn't measure up to the size of Alibaba's earnings and earnings growth rate," analyst Robert Wagner wrote.

Alibaba's announcement continues a flurry of IPO filings by Chinese technology companies. Internet security application developer Cheetah Mobile is expected to go public on the New York Stock Exchange on Thursday in an IPO expected to raise $153.75 million to $178.35 million. Tuniu, an online tour-booking website, plans to hold an IPO Friday on the Nasdaq Stock Market in a $120 million IPO.

Three weeks ago, Weibo Corp, the Chinese micro blogging service owned by Sina Corp and Alibaba Group Holdings Ltd, raised $285.6 million in a Nasdaq IPO while real-estate listings website Leju Holdings Ltd raised $100 million in an initial offering on the NYSE.

"The key question for China is how much new money, if any, Alibaba will raise in this US IPO," said Peter Fuhrman, chairman and CEO of Bejing-based China First Capital.

If all the cash goes to Japan's Softbank and US's Yahoo, then it's hard to see how Alibaba, its customers and the hundreds of millions of Taobao-addicted Chinese consumers will benefit from the IPO. US web-portal company Yahoo is a 24 percent Alibaba shareholder, while Japan's Softbank has a 37 percent stake.