 "Alibaba's banks boost IPO size to record of $25 bn")
Alibaba Group Holding Ltd's initial public offering became the biggest ever at $25 billion, after the company's bankers exercised an option to boost the deal size by 15 per cent.
The underwriters bought an additional 48 million American depository shares from the company at the IPO price of $68 each, according to a statement from Alibaba on Monday. Including the "greenshoe," Alibaba was able to surpass the current IPO record held by Agricultural Bank of China Ltd's $22.1-billion sale in 2010.
Shares of Alibaba declined on Monday after surging 38 per cent during their trading September 19 debut. That was the biggest first-day jump for an IPO of at least $10 billion, data compiled by Bloomberg show, and made Alibaba among the most valuable companies in the US.
Underwriter fees
Including the overallotment, Alibaba's underwriters earned $300 million in fees, taking home 1.2 per cent of the proceeds, according to a filing on Monday. Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc, JPMorgan Chase & Co and Morgan Stanley each earned 15.7 per cent of the fees, while Citigroup Inc's share represented 7.9 per cent, the filing shows. Alibaba's 28 other underwriters received 1 per cent or less apiece.
Alibaba, led by billionaire chairman Jack Ma, slipped 3.9 per cent to $90.25 at 11:04 am in New York on Monday.
About 50 per cent of Alibaba's IPO was allocated to 25 institutional investors, people familiar with the matter said last week. Such a concentrated deal encouraged more fund managers to buy on the first day of trading, as they sought exposure to Alibaba's dominance over a booming e-commerce industry in the country of 1.36 billion people.
McKinsey & Co predicts online commerce in the world's second-largest economy will reach $395 billion next year, triple its 2011 level. Alibaba's retail platforms helped generate 6.1 billion package shipments in the 12 months ended June, accounting for 54 per cent of the nation's total, the company said in August.
Operating profit
Operating profit at Alibaba advanced to $1.1 billion in the three months ended June, or 42 per cent more than the combined profit of Amazon and eBay for the period. Revenue rose 46 per cent in local currency to the equivalent of $2.54 billion.
Alibaba drew crowds of money managers to meetings held around the world as the company pitched itself this month to prospective shareholders. As many as 800 people turned up to the first event at New York's Waldorf Astoria hotel.
Ma, who started Alibaba from his Hangzhou apartment in 1999 with $60,000, watched his net worth swell to $26.5 billion as the shares rose, according to the Bloomberg Billionaires Index. The 50-year-old former schoolteacher is China's richest man, trailing only Hong Kong property tycoon Li Ka-shing among Asian billionaires.
Simpson Thacher & Bartlett LLP and Sullivan & Cromwell LLP provided legal advice. Rothschild was Alibaba's IPO advisor.
The underwriters bought an additional 48 million American depository shares from the company at the IPO price of $68 each, according to a statement from Alibaba on Monday. Including the "greenshoe," Alibaba was able to surpass the current IPO record held by Agricultural Bank of China Ltd's $22.1-billion sale in 2010.
Shares of Alibaba declined on Monday after surging 38 per cent during their trading September 19 debut. That was the biggest first-day jump for an IPO of at least $10 billion, data compiled by Bloomberg show, and made Alibaba among the most valuable companies in the US.
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"Expectations for this company are sky high," Li Muzhi, a Hong Kong-based analyst at Arete Research Service LLP, said on Monday by phone. "The market seems to be using Alibaba as a proxy for the macroeconomy and consumer economy."
Underwriter fees
Including the overallotment, Alibaba's underwriters earned $300 million in fees, taking home 1.2 per cent of the proceeds, according to a filing on Monday. Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc, JPMorgan Chase & Co and Morgan Stanley each earned 15.7 per cent of the fees, while Citigroup Inc's share represented 7.9 per cent, the filing shows. Alibaba's 28 other underwriters received 1 per cent or less apiece.
Alibaba, led by billionaire chairman Jack Ma, slipped 3.9 per cent to $90.25 at 11:04 am in New York on Monday.
About 50 per cent of Alibaba's IPO was allocated to 25 institutional investors, people familiar with the matter said last week. Such a concentrated deal encouraged more fund managers to buy on the first day of trading, as they sought exposure to Alibaba's dominance over a booming e-commerce industry in the country of 1.36 billion people.
McKinsey & Co predicts online commerce in the world's second-largest economy will reach $395 billion next year, triple its 2011 level. Alibaba's retail platforms helped generate 6.1 billion package shipments in the 12 months ended June, accounting for 54 per cent of the nation's total, the company said in August.
Operating profit
Operating profit at Alibaba advanced to $1.1 billion in the three months ended June, or 42 per cent more than the combined profit of Amazon and eBay for the period. Revenue rose 46 per cent in local currency to the equivalent of $2.54 billion.
Alibaba drew crowds of money managers to meetings held around the world as the company pitched itself this month to prospective shareholders. As many as 800 people turned up to the first event at New York's Waldorf Astoria hotel.
Ma, who started Alibaba from his Hangzhou apartment in 1999 with $60,000, watched his net worth swell to $26.5 billion as the shares rose, according to the Bloomberg Billionaires Index. The 50-year-old former schoolteacher is China's richest man, trailing only Hong Kong property tycoon Li Ka-shing among Asian billionaires.
Simpson Thacher & Bartlett LLP and Sullivan & Cromwell LLP provided legal advice. Rothschild was Alibaba's IPO advisor.