Alibaba To Raise Up To $12.9 Billion In World’s Biggest Public Listing This Year

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Topline: In the world’s biggest IPO so far this year, Chinese e-commerce giant Alibaba is set to raise up to $12.9 billion in a landmark public listing in Hong Kong, boosting the financial markets of a city gripped by political unrest and recession.

• The debut on the Hong Kong stock exchange is a secondary listing for Alibaba, which initially went public on the New York Stock Exchange in 2014, raising $25 billion in the world’s biggest IPO in history.
• Alibaba said that it would price shares at $HK176 ($22.50) each, a discount of 2.9% to its New York Stock Exchange closing price (eight Hong Kong shares will be worth one U.S.-listed share), Reuters confirmed on Wednesday.
• The price means that Alibaba is set to raise at least $11.3 billion, and up to $12.9 billion if a greenshoe option to list more shares is exercised—but that looks likely since the skyrocketing demand for shares caused Alibaba to close its books earlier than expected, according to CNBC.
• Scheduled for November 26, the listing could swell Alibaba’s cash pile to around $44 billion, which would be more than any other internet company and double that of rival e-commerce giant Tencent, according to Bloomberg.
• It would also be the world’s biggest IPO so far in 2019: Alibaba’s Hong Kong listing exceeds Uber’s $8.1 billion public debut in New York and AB InBev’s $5 billion IPO of its Asia business in Hong Kong earlier this year.
• Alibaba’s listing will likely be eclipsed by Saudi Arabia’s state oil giant Saudi Aramco, going public on the Riyadh stock exchange in December, with its IPO set to raise up to $25.6 billion–that could break Alibaba’s existing record for the world’s largest IPO in history.

Key background: Alibaba’s listing will help boost Hong Kong’s financial markets, given that the city recently slid into recession for the first time in over a decade, following more than five months of anti-government protests. And with the ongoing U.S.-China trade war leading the Chinese government to call for companies to publicly list closer to home, Alibaba’s listing helps cement the Hong Kong Stock Exchange as one of this year’s largest venues for IPOs—and that could set an example for other Chinese unicorns to opt for Hong Kong over the U.S. when they go public.

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Tangent: In its eleventh edition of Singles’ Day, the biggest shopping event in the world, Alibaba set a new sales record of $38.4 billion in gross merchandise volume during the 24-hour shopping bonanza. To compare, Singles’ Day far outpaces other big e-commerce days in the U.S., with Alibaba’s haul more than double the amount sold on last year’s Black Friday, Cyber Monday and Amazon Prime Day combined.

Forbes.com