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Wednesday 29th May 2024, 2:00 PM (BST)

Alibaba heads towards biggest ever tech IPO

Alibaba has officially filed for a stock market flotation that could prove the biggest tech IPO in history.

It’s been a long time coming, but e-commerce giant Alibaba has finally filed for its initial public offering (IPO) in the US – and it could make history when it eventually floats.

Alibaba’s 6 May filing revealed that the company plans to raise around $1 billion (£589 million) from the flotation, but that is generally agreed to be a ballpark figure used calculating the different fees involved in listing the firm.

In fact, the BBC reports that analysts are anticipating the IPO will raise over $15 billion, even surpassing Facebook’s debut.

Lots of information has yet to be confirmed, such as how many shares will be sold or an estimated price range. In fact, Alibaba has not even said whether it plans to list on the Nasdaq or the New York Stock Exchange. Since it could still be months before a price is set or any final decisions made, some caution might have been expected.

But given the fact that Alibaba Holdings Inc powers around 80 per cent of e-commerce in the world’s second-largest economy, it is perhaps unsurprising that investors and analysts are already eyeing the firm’s potential.

The company’s major shareholders are all likely to profit hugely from the IPO – Japanese telecoms firm Softbank owns more than 34 per cent, which is guaranteed to be worth far more than the $20 million investment it made in the one-year-old company in 2000.

Yahoo also owns 22.6 per cent, which is currently worth close to $27 billion. It is already obliged to sell some of its stake after the listing, perhaps explaining why many investors are wary of its core business proposal without a stake in Alibaba.

Meanwhile, the individual who is set to benefit the most will be the company’s founder Jack Ma, who still has a stake of nearly nine per cent, making him one of the richest individuals in China. The former English teacher is a passionate environmental activist, having stepped down from his role as chief executive last year to concentrate on those issues, but he still stands to gain hugely from the listing.

Concerns remain about the leadership structure being proposed for Alibaba, which was the main reason the firm was unable to list in Hong Kong. But whatever changes may happen between now and the IPO, the markets will be eagerly awaiting the firm’s stock market debut.

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