Alibaba is poised to make the biggest stock market flotation in history after firing the starting gun last night on its $160 billion market debut.
Filings with the US Securities and Exchange Commission put an initial price range of between $60 and $66 a share for the Chinese e-commerce business.
The documents suggest that it will raise $21.1 billion from the float, which would be a record on Wall Street.
At the middle of that range, the company would be valued at $160 billion. Other tech flotations, however, such as Facebook and Twitter, have exceeded that initial range.
The setting of the price will be followed by a two-week roadshow that will market the shares to investors in the US, Asia and Europe.
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The SEC filing sets out the banks that will be involved in the highly lucrative float. Goldman Sachs is the so-called stabilisation agent, in charge of overseeing early trading in the shares. There is a “friends and family” programme, administered by Credit Suisse, which will ensure that employees and others close to the company get access to the shares.
Alibaba, China’s biggest e-commerce company, provides a digital marketplace that matches sellers with buyers of a range of goods. The strong appetite among investors for the float reflects hope that the business will grow as China’s 1.2 billion consumers become used to trading goods and services on the internet.
It is China’s biggest online business, with deals on its sites totalling $248 billion last year — more than eBay and Amazon combined.
The company was founded in 1999 by Jack Ma, the chairman, in his one-bedroom apartment in Hangzhou, eastern China. A former English teacher and translator, he stepped down as the company’s chief executive last year.
Trading in the shares on the New York Stock Exchange could start as soon as September 19.
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Mr Ma could emerge with as much as $840 million by selling 12.75 million shares at the top of the range, according to reports from Wall Street overnight. After the float he will still have about 193 million shares, worth $12.76 billion.
SoftBank, the investor in technology stocks, which has 32 per cent of Alibaba, plans to keep all of its shares. Its stake would be worth more than $52 billion at the top of the range.
If Alibaba raises $21.1 billion, as the SEDC filing suggests, it would outrank the $17.9 billion raised by Visa in March 2008.
Unlike other high tech businesses that have been brought to market, Alibaba is profitable. Sales in the second quarter rose 46 per cent to $2.54 billion, and net income nearly tripled to $1.99 billion from the year before. The company plans to trade under the ticker BABA.