Alibaba’s IPO: What the latest filing reveals

Investors have a host of questions about the initial public offering of Alibaba Group Holding Ltd., the Chinese e-commerce giant.

Investors have a host of questions about the initial public offering of Alibaba Group Holding Ltd., the Chinese e-commerce giant.

Yet the company’s latest filing, released after the close of trading Friday, offers up a slew of new information.

1. How many shares are they selling, at what price and how much are they raising?

The Chinese e-retailer said it would sell 320.1 million shares within an expected range of $60 and $66. In that range, Alibaba could raise between $19.2 billion and $21.1 billion.  Including the extra shares set aside for underwriters, the amount raised could jump to $24.3 billion.

The e-retailer would be the largest IPO ever of a U.S.-listed company, if underwriters exercise their full provision and the company ultimately prices within the listed range. Visa Inc. raised $19.65 billion in its 2008 IPO; General Motors Co.GM -0.14% raised $18.1 billion in 2010; and Facebook Inc.FB  1.72% raised $16 billion.

Both the price and the number of shares offered to the market could change in the next two weeks. The final price in the IPOs of both Twitter TWTR  0.92% and Facebook exceeded the initial ranges the two companies provided.

2. What’s the starting point for the market value of this company?

At the midpoint of the listed range, Alibaba would be valued at $155 billion.

3. Who is selling?  

Alibaba’s founder Jack Ma is selling 12.75 million of the 206.1 million shares he owns. He currently owns 8.8% of Alibaba, and the portion he’s selling works out to 0.5% of the company. Based on the price range listed, the sliver of his stake that he’s selling could be valued between $765 million and $841.5 million.

Joseph Tsai, Alibaba’s co-founder, owns 83.5 million shares, or 3.6% of the company. Mr. Tsai disclosed that he’ll sell 4.25 million of those shares, amounting to 0.2%.

SoftBank, which owns 34.1% of the company, had previously said it had no plans to sell down its stake and stuck to that in the latest filing.

Yahoo, which owns 523 million shares, or 22.4% of the company, will be selling 121 million shares, or 4.9% of the company. The amount they’re selling is valued between $7.26 billion and $7.99 billion.

Other major holders include a unit of the China Investment Corp., cited in the filing as Fengmao Investment Corp., which is selling 14.2 million shares, or 0.6%. It had held a 2.8% stake. Private-equity firm Silver Lake owns 58.9 million shares, or 2.5%, and it plans to sell 4.1 million shares.

4. Can friends and family buy into the deal before it starts trading? 

Yes. Alibaba is planning to let employees and other people close to the Chinese e-commerce company buy some shares in its impending IPO. In the filing, the company said it will set aside up to 6% of its shares in a so-called friends-and-family plan.

The plan lets employees and other chosen associates of Alibaba buy stock at its IPO price, a right that’s usually reserved mostly for mutual funds and other institutional investors. The plan gives the friends and family participants a chance to participate in a possible first-day stock pop–or suffer if the stock falls.

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