This page has been archived and commenting is disabled.
Alibaba and the $40 billion

Isn’t it fitting that the original story was Ali Baba and the Forty Thieves? But, this time round the modern day version of the Chinese story with Alibaba and the Initial Public Offering that has been programmed for in or around August 2014 will be the biggest IPO this year and will bring in the staggering sum of $40 billion for its employees.
The co-founders of the Chinese company Jack Ma and Joe Tsai are aiming for the launch that should take place in true Chinese tradition on the 8th of the 8th. What better could you do in a country where the number 8means ‘fortune’? Only problem might be is that it’s a Friday and Friday launches tend not to go down too well in trading history.
Alibaba filed for a launch in May and the date has yet to be confirmed officially. They will not be allowed to do so until the interviews and meetings with the Securities and Exchange Commission have finalized. Then, the company will be full-steam ahead to pitch investors with what looks like a boon for business and the coffers of the already dollar-rich billionaires that founded the company. Jack Ma, for example, is China’s 8th richest person and has a net worth of $10 billion.
Ma, Tsai and a close-knit group of company executives (28 people in total) own 14% of Alibaba.
But, it’s not only Ma and Tsai that will be raking it in once the launch happens. The past and current employees of the company hold just over a quarter of the shares of the company (26.7%) in stock options and other awards that were provided as incentives back 15 years ago in 1999.
Apparently, the company has gone as far as to start counselling of its employees to help them deal with the share of the tens of billions of dollars that could be brought in with the IPO when they will be allowed to sell of their shares. Although their shares may be locked up for months before they can cash in.
According to some sources, employees have been looking at how to spend that money on investments in property in the USA, starting business ventures in China and of course buying up the trappings of the consumer world and overt social status such as cars and artwork. But, because the IPO will be going ahead in New York, the majority of the money is suspected to be kept outside of China.
There was already a sell-down of shares in 2011, with employees selling about $2 billion in shares then. Apparently, according to sources at Alibaba, it was better to prepare the employees for immense wealth, little by little, rather than throwing millions at each of them. Ma sold off $162 million in shares then and his co-founder $108 million.
It’s the Japanese telecom company SoftBank that owns the largest stake in the company (34.4%) and the US company Yahoo that has 22.6%.
Alibaba has already acknowledged that it will have its work cut out keeping those employees on after the IPO if they decide to cash in and take advantage. The company stated: “It may be difficult for us to continue to retain and motivate these employees, and this wealth could affect their decisions about whether or not they remain with us”.
So, with the IPO of Alibaba looming fast it’s going to be ‘Open Sesame’ for the employees that will be raking it in in the biggest launch on a stock exchange this year. There’s no denying that the treasure that Alibaba is sitting on will certainly be worth fighting over.
Alibaba is an online company which enables shoppers to buy and vendors to sell as well as make on-line payments. IT’s Amazon, Paypal and eBay all rolled into one on a Chinese scale. It’s two retailers, Taobao and Tmall offering non-brand products and branded goods respectively, make up more than 50% of all parcel deliveries in the People’s Republic of China today. Combined transaction value reached $163 billion in 2012. There are 24, 000 workers employed by Alibaba and 36.7 million registered users today. In the last quarter of2013, Alibaba posted an increase in revenue equivalent to 66% (reaching $3.06 billion. Net income for the same period stood at $1.36 billion.
Originally posted: Alibaba and the $40 billion
- advertisements -


You would feel much differently if their model had produced part of the $40B for you.
Ridiculous business model produces NOTHING. How American... How...KEYNESIAN
I'm more interested in seeing where Yahoo will go once Alibaba goes public, and they are obliged to sell down part of their holdings.
Where oh where will Yahoo go...
Good for them. If you make it, you make it. Obviously, they've made it.
And your point?
Could be Twitter...could be Faceplant.
Sell SoftBank that's fer sure.
I use Yahoo all the time now. Can't wait for them to come out with their own phone too. Don't know why they just don't buy net app actually.