Monday, September 22, 2014

Chinese Alibaba IPO set a world record – RBC

Chinese Alibaba IPO set a world record – RBC

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Initial Public Offering (IPO) of Alibaba China officially became the largest in history, after arranging banks exercised their option «green shoe» – the right to place additional shares in high demand. Underwriters IPO (35 banks), sold 48 million shares, to exercise the option in full, the company said in a press release. As a result, the amount of accommodation has increased by 15% – up to $ 25 billion – and the same 15% increase in bank fees. The previous world record was held by the Issuer as the Chinese in 2010, Agricultural Bank of China IPO at $ 22.1 billion (based on the option).

e-commerce giant Alibaba is located in New York on Friday: the company and shareholders sold 320 million shares (about 13% of the share capital) at $ 68 apiece. The whole business was valued at $ 168 billion. Alibaba debut on the New York Stock Exchange, as expected, turned out to sverhudachnym: the first day the stock rose 38% (to $ 93.9), and the market capitalization reached $ 231 billion. Neither one company had not grown so much in the first day of trading after the IPO size of $ 10 billion, checked Bloomberg.

Banks underwriters may exercise the option until October 15, at the offering price ($ 68 per share). In practice, the Bank purchases securities from the issuer at a slight discount to the price of IPO, earning on this difference. In the deal Alibaba discounts and commissions to underwriters were 1.2% of the accommodation, the company opened on Monday in the final version of the prospectus IPO. This means that banks have earned $ 300 million.

In the 35 banks participated in the placement, and the key role played six – Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase and Morgan Stanley (Joint Bookrunners). To record IPO wanted to be involved in everything leading investment banks, but three – Bank of America, UBS and Barclays – had to step aside: earlier this year, they led the Chinese IPO retailer JD.com (competitor Alibaba), turned out a conflict of interest.

Of the 48 million additional offering of 26.1 million shares fell on most Alibaba, 18,3 млн – the share of the American Yahoo. Founder of Alibaba, chairman Jack Ma has implemented additional 2.7 million shares, and the vice-chairman Joseph Tsai – 903 thousand. Thus, Yahoo increased its revenue from the sale of shares of Alibaba in the IPO to $ 9.5 billion, and Jack Ma – up to $ 1 billion.

Alibaba has established not only a record for the size of the IPO, but also on the value of the company at the IPO, says Dealogic. Evaluation of Alibaba Option Adjusted «green shoe» was $ 169.4 billion, the previous record held all the same Agricultural Bank of China with a capitalization of $ 133.4 billion in the IPO.

Alibaba Shares on the NYSE on Monday evening traded in the red Friday after an impressive growth. As of 19:45 MSK paper fell by 4.1% (to $ 90).

Alibaba in figures (2013):

Turnover – $ 296 billion

The number of buyers – 279 million people

The number of sellers – 8,5 млн people

The number of orders – 14,5 млрд Order

About how Jack Ma and Alibaba began their journey and walked to the records, please click here.

Ivan Tkachev

September 22, 2014

RBC

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