Chinese Tech Giants Go Public: Alibaba’s $15B IPO, Weibo’s $500M IPO
Two major Chinese tech giants are slated to go public, expecting to raise billions of dollars in capital.
The first is e-commerce site Alibaba Group which said on Sunday that it would go public. Analysts said the firm could raise up to $15 billion, making it 2014's biggest initial public offering (IPO).
With over $150 billion worth of goods traded on its online platforms annually, Alibaba is one of the world's largest Internet firms, bigger than American e-commerce sites Amazon and eBay combined.
The Sunday announcement ended months of speculation where it would launch its IPO after talks for a Hong Kong listing didn't push through in 2013 because the bourse was not willing to change its regulations to accommodate Alibaba's different management structure wherein top executive who own 10 per cent of the firm retain control of the board.
Alibaba said in a statement, "Alibaba Group has decided to commence the process of an initial public offering in the United States ... This will make us a more global company and enhance the company's transparency, as well as allow the company to continue to pursue our long-term vision and ideals."
The Wall Street Journal reported that Alibaba has hired Credit Suisse Group, Deutsche Bank, Goldman Sachs Group, JP Morgan Chase and Morgan Stanley to play major roles in the IPO.
Alibaba added that it would consider listing its shares in China in the future, but it did not provide a timetable.
On Friday, Sina Group, which is the company behind Weibo - China's equivalent of Twitter - also filed for a potential U.S. IPO to raise $500 million.
However, it warned potential shareholders of uncertainty due to Chinese government regulation of the country's media, including the cyber world, citing in particular a new law that became effective in September. The regulation imposes three years prison term for Internet users who knowingly make or share defamatory or false information.
The Sina Group said in its filing, "The implementation of this newly implemented judicial interpretation may have a significant and adverse effect on the traffic of our platform and discourage the creation of user generated content."
As of December 2013, Weibo has 61.4 million users, up by 36 per cent compared to a year earlier.