Alibaba is on the brink of launching an IPO that has the potential to become the largest in U.S. history in terms of the amount raised.
The Chinese e-commerce company expects to hold meetings regarding the U.S. IPO on 8 September and will seek to establish an initial price by 18 September to allow trading to begin on September 19, Bloomberg reported.
Alibaba could raise up to $20 billion (€15.2 billion) through the IPO, which Bloomberg noted would make the offering the most valuable in U.S. history. An IPO by Visa in 2008 is currently the largest listing, with $19.6 billion raised.
The $20 billion valuation is $5 billion higher than the value anticipated in May, when Alibaba initially filed IPO registration documents with the U.S. Securities and Exchange Commission. However, Bloomberg noted Alibaba is pricing its IPO at around 22% less than analysts say the company is worth, suggesting the e-commerce company is attempting to avoid the pitfalls of companies like Facebook, which saw its value plummet after its IPO in 2012.
Alibaba is China’s top e-commerce site. The company handled $248 billion worth of transactions in 2013, beating the combined value of trades by rivals Amazon and eBay. Around 15% ($37 billion) of Alibaba’s 2013 transactions were conducted on mobile devices.
The company’s IPO will be a welcome boost for Yahoo!, which holds a 22.6% stake in Alibaba and is required by its shareholder agreement to offload 208 million shares – around half its holding – in the event Alibaba goes public.
Alibaba’s largest shareholder, Japanese conglomerate SoftBank, recently blamed an adjustment to Alibaba’s convertible shares made in the run-up to the IPO for a slump in net profit in the three months to end June – SoftBank’s fiscal Q1.
The Japanese company previously stated it has no interest in paring back its 34.4% stake in Alibaba, and noted in its earnings release that it expects the Q1 loss to be converted into profit once the IPO is complete.