China-based e-commerce firm Alibaba Group will reportedly hold its highly-anticipated initial public offering in the U.S. and not Hong Kong, following failed negotiations over a listing in Asia. Alibaba's IPO will likely value the company at $100 billion or more, according to analysts, making the launch the most coveted since Facebook's debut on NASDAQ last year.
Alibaba officials – led by company chairman and Counselor Power 50 member Jack Ma – decided against listing in Hong Kong because they prefer a specific partnership structure that will help them retain absolute control even as the firm goes public. A Hong Kong listing policy might have allowed key investors – instead of Alibaba's founders and top personnel – to nominate a majority of board members.
Alibaba and listing officials in Hong Kong didn't release any official comments on Wednesday, although Charles Li, CEO of Hong Kong Exchanges & Clearing Ltd., wrote a thinly-veiled blog entry about the situation. "We need to look objectively at the issues and not be swayed by emotional arguments or be distracted by specific circumstances of any given company or issue," Li wrote. "In the end, we should take responsibility for doing what is right and best for Hong Kong, not just what is safe and easy."
It remains unclear whether Alibaba will list on the New York Stock Exchange or NASDAQ, although the former appears more likely, analysts contend. Alibaba has not chosen underwriters for the stock sale yet either, although leading firms like JPMorgan Chase, Credit Suisse and Morgan Stanley are among the most aggressive suitors. In such a substantial IPO, underwriters will assuredly collect millions of dollars in fees alone, according to experts.
Ma, a former schoolteacher, founded Alibaba in 1999 and has built the company into Asia's most powerful Internet firm. Company holdings include Alibaba.com, Taobao, Tmall.com and Alipay, each of which hold dominant market share positions in China. Alibaba, which operates websites where merchants can sell items – including promotional products – directly to consumers worldwide, had its Alibaba.com division listed publicly on the Hong King Exchange until the company took it private last year. Alibaba's 2012 revenues were estimated by analysts to be more than $4 billion.