The IPO may value Alibaba at more than $200 billion
Alibaba Group Holding Limited, commonly known as Alibaba, is a Chinese e-Commerce player. It’s the largest online and mobile commerce company in the world in terms of gross merchandise volumes (or GMV) as of 2013, according to the company’s latest F-1 filings.
It has recently gotten a lot of media attention because of its impending initial public offering (or IPO) in the U.S. Alibaba may IPO as early as next week and could raise more than $20 billion, according to Wall Street Journal.
This will be one of the biggest IPOs in the recent history of the U.S. stock market. The IPO may value Alibaba at more than $200 billion, which would be closer to the combined market cap of eBay (EBAY) and Amazon (AMZN) at $225 billion.
Alibaba’s entry into the U.S. e-Commerce market will make it more competitive
According to company filings and as the chart above shows, although Alibaba’s GMV year-over-year growth rate has declined from 65% in 2Q13 to 45% in 2Q14 due to the larger base effect, it’s nonetheless healthy growth.
Alibaba recently launched its U.S. shopping website named 11Main.com to create more competitive pressure on eBay and Amazon. Alibaba could also use its IPO proceeds to acquire smaller U.S.-based e-Commerce companies. The U.S. e-Commerce market is getting more competitive, with Google (GOOG) (GOOGL) also recently starting its same-day shopping service named Google Shopping Express service.
To access our premium industry primers, company overviews and financial models, please email firstname.lastname@example.org. Specify the industry or company ticker(s) you are interested in and a representative will get in touch with you.