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http://dealbook.nytimes.com/2014/05/06/alibaba-files-to-go-public-in-the-u-s/
The Chinese e-commerce behemoth Alibaba Group filed paperwork on Tuesday in the United States to sell stock to the public for the first time, in an embrace of the global capital markets that represents a coming-of-age for China's booming Internet industry.
"Alibaba is the fastest-growing Internet company in one of the fastest-growing economies in the world," said Sameet Sinha, an analyst with B. Riley & Company, a boutique investment bank in Los Angeles. "They are like an Amazon, an eBay and a PayPal."
In the filing, Alibaba said it intended to raise $1 billion in an initial public offering — a figure used to calculate its registration fee. But the company is expected ultimately to raise $15 billion to $20 billion, which would make it the biggest American I.P.O. since Facebook's $16 billion offering in May 2012.
When it makes its debut on the New York Stock Exchange or the Nasdaq market, Alibaba is also expected to have a share price that could value the company at roughly $200 billion — more than the market value of Facebook, Amazon.com or eBay, although still trailing that of Google or Apple.
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In China, Alibaba's brands are household names. It operates an online shopping center, Tmall, where global companies like Walt Disney, Apple, L'Oréal, Nike and Procter & Gamble have set up virtual storefronts to sell products directly to Chinese shoppers. Another of its sites, Taobao, is aimed largely at small Chinese firms that want to sell items to Chinese consumers.
The company's digital payment affiliate, Alipay, not only handles transactions on its sites, but is also widely used as a mobile payment system on cellphones in China, much as credit cards are used in other countries. It handled $519 billion worth of payments last year.
Last year, the value of all merchandise sold on Alibaba exceeded $248 billion, more than the volume on eBay and Amazon combined. In the last three months of last year, nearly 20 percent of the purchases on Alibaba were made through mobile phones.
American companies like Google and eBay can only dream of making the kind of profit margin that Alibaba enjoys. In the 2013 calendar year, Alibaba had net income of $3.56 billion on revenue of $7.95 billion. That translates into a profit margin of roughly 45 percent. In comparison, eBay mustered a 17.8 percent margin.
Alibaba has much higher profit margins than American Internet companies, analysts say, because its costs are low. It doesn't own the merchandise sold on its sites, making money instead from the merchants that pay a commission for access or that buy ads to promote themselves. Alibaba also enjoys a low tax rate of about 10 percent.
Alibaba is one of China's top three Internet players, along with the search engine company Baidu and the media and gaming conglomerate Tencent, but is bigger and more profitable than those rivals.
Some investors have resorted to indirect routes to get a piece of Alibaba, like buying stock in Yahoo and SoftBank of Japan. SoftBank, the Japanese telecommunications giant, is Alibaba's biggest investor with a 34.4 percent stake. Yahoo is next, with 22.6 percent.
Jack Ma, Alibaba's founder, is the biggest individual shareholder, owning 8.9 percent of the stock; he is followed by his longtime lieutenant, Joseph C. Tsai, who owns 3.6 percent.
When Yahoo first bought a 40 percent stake in 2005, it valued Alibaba at just $2.5 billion. Six years later, when a consortium of investors took another stake, the company was valued at about $32 billion. Now, analysts estimate that Alibaba may be worth anywhere from $130 billion to $235 billion.