NEW YORK — Alibaba Group Holding Ltd. is seeking to raise as much as $21.1 billion in its initial public offering, in what could be the largest sale of new stock in the U.S. ever.
The Chinese company and shareholders including Yahoo Inc. plan to sell 320,106,100 million American depositary shares for $60 to $66 apiece, according to a regulatory filing Friday. At the high end of that range, the offering would surpass Visa Inc.’s $19.7 billion IPO in March 2008 and give the company a market value of $162.7 billion.
Alibaba’s executives are now able to meet fund managers to build demand for the IPO and they plan to begin the roadshow in New York next week, people with knowledge of the matter have said. The Hangzhou-based company has garnered years of attention for its scale — with 279 million active buyers in the year through June — and its exposure to a growing Internet consumer base in China.
The final size of the offering will be determined after the presentations to potential investors. Alibaba currently plans to set a price for the shares on Sept. 18, with trading to start the next day, people have said.
Alibaba provides various marketplaces for buyers and sellers as well as services that help them conduct their businesses. Taobao Marketplace, started in 2003, enables millions of individuals and small businesses to sell products, while Tmall.com provides a virtual shopping mall, with retailers and brands offering products, and Juhuasuan operates a flash-sales model.
Those three sites accounted for 82 percent of Alibaba’s sales in the year through March. The company posted revenue of $8.46 billion for the period, with $3.76 billion in net income.
In the company’s first quarter, profit surged as advertisers boosted spending on the Tmall and Taobao platforms. Net income almost tripled to $1.99 billion, or 84 cents a share, in the three months ended June 30, helped by a $1 billion gain on the revaluation of larger stakes acquired in UCWeb Inc. and OneTouch.
Alibaba filed to go public in May, choosing the U.S. as its venue after Hong Kong regulators rejected its proposed governance structure. Alibaba is governed by a partnership of 27 insiders, including co-founders Jack Ma and Joseph Tsai, who will have the ability to nominate a majority of the board.
Yahoo’s valuation is partially pinned on its 22.4 percent stake in Alibaba, as investors speculate that the Sunnyvale, Calif.-based company could use proceeds from the IPO for large acquisitions. In July, the company said it planned to keep a bigger stake in Alibaba than it originally projected, and would return at least half of the cash it raises to shareholders. Japan’s SoftBank Corp. owns a 34 percent stake of Alibaba, filings show.
Alibaba chose the New York Stock Exchange as a listing destination in June, and will trade under the symbol BABA.
Credit Suisse Group, Deutsche Bank, Goldman Sachs, JPMorgan, Morgan Stanley and Citigroup are managing the offering. Simpson Thacher & Bartlett and Sullivan & Cromwell are providing legal advice.
