Sep. 25 - Yahoo and Softbank stand to make huge profits off Alibaba's expected IPO. China's Internet giant has a bigger estimated valuation than Facebook. Fred Katayama reports.
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Alibaba's mammoth IPO will be a huge windfall to Yahoo and other investors.
Analysts estimate that Alibaba is worth roughly $120 billion, a tad larger than Facebook's current market cap.
Yahoo owns a 24 percent stake in Alibaba and is keen to sell part of that. It acquired those shares as part of a $1 billion investment it made in 2005, then sold half of it last year. Softbank, the Japanese company that bought Sprint-Nextel, is Alibaba's biggest shareholder at 35 percent. Alibaba's founder Jack Ma, CFO Joe Tsai and other company executives own about 10 percent. Other big investors include some of the world's largest sovereign wealth funds, Temasek of Singapore and China Investment Corp.
Also getting some of the yuan: the NYSE-Euronext or Nasdaq OMX, which will compete like mad for the listing. The NYSE has been trying to lure more tech companies away from the Nasdaq.
The IPO comes at a bullish time for tech stocks and Chinese Internet companies. Tencent Holdings is up 62 percent this year, and Baidu up 50 percent.
Sources tell Reuters the U.S. won out over Hong Kong because its laws would enable Ma and his senior executives more control over the company. And that victory ensures a lot of business for American firms servicing the IPO industry - from lawyers and banks managing the listing to hotels holding road shows.
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