Alibaba increases valuation to $130 billion

The biggest IPO in the tech industry’s history just got bigger.

Alibaba, China’s e-commerce giant and one of the largest Internet companies in the world, on Friday increased its valuation to $130 billion less than a month before its much-anticipated initial public offering on the New York Stock Exchange. That’s about $13  billion more than the Hong Kong-based company valued itself at in its original filing with the Securities and Exchange Commission in June.

The new figure is based on a higher share price at which the company is granting stock compensation to employees. The company now values those shares at $56 each, up from $50 in the prior filing.  The company has decided to expand its executive board by two seats from nine to 11.

Analysts, though, have much higher estimates for Alibaba, ranging from $150 billion at the low end to $230 billion at the high end. The company could raise $15 billion to $20 billion when it begins trading, potentially surpassing Facebook’s record-breaking $16 billion IPO in May 2012.

Alibaba’s businesses include online shopping, business-to-business sales, online payments, shipping, wholesale trade and cloud computing. According to filings with the SEC, Alibaba’s retail marketplace last year processed 11.3 billion orders from 231 million active buyers for a total of $248 billion in spending, more than the transaction volume on eBay and Amazon combined. It processes about 80 percent of China’s ecommerce transactions, and is aiming for a bigger slice of the U.S. retail market, too.

Alibaba is expected to go public next month, with all eyes on Aug. 8, a number symbolizing fortune, prosperity and luck in Chinese. It will trade on the NYSE under the ticker symbol BABA.

 

Photo: Jack Ma, chairman of Alibaba Group Holding Ltd., speaks during a keynote speech at the China 2.0: Transforming Media and Commerce conference in Stanford, California, U.S., on Friday, Sept. 30, 2011. Photographer: David Paul Morris/Bloomberg

Heather Somerville Heather Somerville (248 Posts)

Heather Somerville is a business reporter covering venture capital and startups for the Bay Area News Group.