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Alibaba IPO may break the bank, blow past $16 billion

updated 05:22 pm EDT, Wed May 7, 2014

At least $3 billion headed to Yahoo stake purchased in 2005

Chinese search engine monolith Alibaba filed an initial public offering (IPO) prospectus on Tuesday. If predictions are accurate, the IPO will raise more than $15 billion, and very well could pass the technology IPO record set by Facebook at $16 billion before the offering is complete, with a large percentage of the funds raised headed to Yahoo.

Alibaba Group is a privately-owned group of Internet-based businesses, including online retail and payment services, a shopping search engine and cloud computing services largely dominant in China. In 2012, two of Alibaba's portals together handled 1.1 trillion yuan ($170 billion) in sales, more than competitors eBay and combined.

In March 2013, the company was estimated to have a valuation between $55 billion and $120 billion. In 2013, the company handled $248 billion in transactions across its main online marketplaces, with 20,884 full-time workers in its employ.

Yahoo is required to sell more than a third of its current 22.6 percent stake through the IPO, netting the company around $3 billion during the offering. Alibaba will offer new shares during the IPO as well. With the offering, Alibaba will become the largest China-based company to sell stock in the US on any exchange. Alibaba has shares in US online businesses, such as retail site ShopRunner, ride sharing company Lyft, and luxury purveyor 1stdibs.

by MacNN Staff



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