Alibaba seeks $21.1 bn in record-breaking US IPO

New York/Hong Kong, Sept 6: Alibaba Group Holding, the e-commerce company whose fortunes surged along with China’s economy, plans a historic US initial public offering that may also claim the global record.

Alibaba is seeking a valuation of as much as $162.7 billion, larger than 95% of the Standard & Poor’s 500 Index, as it enters the IPO’s final stages. At the high end of the proposed price range, Alibaba would be the thirdmost valuable Inter net company traded in the US after Google and Facebook. The offering could raise as much as $21.1 billion, according to a regulatory filing on Friday.

Even at the high end, the valuation falls below more optimistic estimates of Alibaba’s worth—analysts surveyed in July put its value at $187 billion, on average. That will give China’s largest e-commerce company room to raise the IPO price as it builds demand during meetings with fund managers, said Henry Guo, an analyst at JG Capital.

“This is below Wall Street’s expectations,” said Guo, who is based in San Francisco. “They prefer a smoother start so that they can push up the prices.”

Alibaba may temper its valuation, some analysts said in July, which could help it avoid the listing flop of Facebook. Those analysts forecast that Alibaba would value itself at about $154 billion, after applying a discount. Bloomberg