China's Alibaba Unveils Its IPO

[Romanowski]

Shares of the e-commerce company partly owned by Yahoo! will begin trading on Nov. 6 in an offering to be co-managed by Goldman Sachs and Morgan Stanley

by Bruce Einhorn


It's the initial public offering that everyone following the Chinese Internet has been anticipating: the listing of Alibaba.com, the business-to-business e-commerce company partly owned by Yahoo! (YHOO). On Oct. 22, company founder and chief executive officer Jack Ma spoke to reporters in Hong Kong via video conference to reveal details of the deal. The company expects to raise about $1.5 billion in an IPO to be co-managed by Goldman Sachs (GS) and Morgan Stanley (MS). Trading will begin in Hong Kong on Nov. 6.
The Alibaba listing is not just a key event for the company; It also promises to be watershed moment for the Chinese online world. With more than 160 million people using the Internet now, China has the world's second-largest Net population after the U.S. But while a few Nasdaq-listed Chinese dot-coms such as search engine Baidu (BIDU) and portal Sina (SINA) have done well by selling keywords or banner advertising, until now there hasn't been a Chinese e-commerce company that's generated much interest among investors.
However, the obstacles hindering the growth of e-commerce in China are starting to become less serious. For years, companies hoping to sell goods online have had to struggle to find ways for Chinese would-be buyers to make payments, since credit cards were not popular among ordinary consumers. That's changing, as credit-card usage increases. Just as important, companies and banks are coming up with other ways to facilitate online payments through services such as Alipay, a PayPal-like offering of Alibaba.
Online Shopping In Its Early Days

"The whole ecosystem is improving," says Liu Bin, an analyst with Beijing-based consulting firm BDA China. There are "nearly 50 third-party payment companies" in China now, he adds. "The e-commerce business in China is just in its early stages," says Liu. "In the future, young users will change their consumption habits, and more people will accept ecommerce."
Online shopping may be down the road, but investor interest in other types of Chinese Internet stocks is already here. Baidu's stock, even after a recent sharp drop following news about a temporary suspension of Internet data centers for technical reasons, is still up 180% so far this year. Sina's is up 80% and its biggest local rival, Sohu (SOHU), has risen 69%. Another hot category: companies that cater to China's eager online gaming fans. The Nasdaq-listed shares of Shanda Interactive (SNDA), China's top gaming company, are up 70% this year. Sales in the second quarter rose 39%, to $75 million, with earnings of $55 million rising more than 200% over the year-earlier period.
Not all Chinese gaming companies are hot. Shanda rivals Netease (NTES) and The9 (NCTY) have seen their share prices languish even as Shanda's has soared, but that's not stopping a new crop of rivals from going public. For instance, Perfect World (PWRD), a Beijing company that specializes in developing and operating online games, started Nasdaq trading on July 26 at $16 a share.
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[ajohnson69]

I've been hearing alot about this....do you know what exchange it's going to be listed on??......none of ours right?