Wall Street is gaga over Alibaba.
It’s slated to become the biggest initial price offering in U.S. history.
Here’s five things you need to know before it goes public.
1) What is Alibaba.com
The company was founded in 1999, and it accounts for more than 60% of all package deliveries in China, the New York Times reports.
Think Amazon on steroids.
Alibaba sells everything from Hello Kitty watches in bulk to fiberglass speedboats, and has 250 million active buyers in China.
Internet use has been rising, especially among the middle-class, which has helped the e-commerce giant generate a massive gross merchandise volume of about $300 billion dollars as of the end of June.
2) Why is Alibaba such a big deal on Wall Street?
It’s all a out the ‘Benjamin’s, Baby!’
As of September 7, 2014, the much-anticipated sale or IPO could raise $20.2 billion by offering 320 million shares.
If so, that would surpass the $16 billion Facebook raised in 2012, making it the biggest tech IPO.
Bottom line: A Chinese company is due to become one of the most valuable companies traded in the U.S.
3) How can I get in on the action?
Alibaba is planning to sell 123 million shares priced between $60 and $66 per share, according to an SEC filing.
So at the midpoint of that proposed range, the company would reap a fully diluted market value of $161 billion!
However, after its road show kicks off in New York on September 8, and analysts say that proposed share price could be much higher.
Investors will know for sure on September 18th when it prices.
Trading of the stock will begin September 19, 2014.
It’ll be listed at the New York Stock Exchange, under the ticker symbol “BABA.”
4) How does Yahoo play into all of this?
Back in 2005, Yahoo had a stake as large as 40% in Alibaba, but it’s since reduced its stake to as little as 16.3%, according to a recent filing.
Given the high expectations for Alibaba when it goes public, Yahoo shares have also been getting a boost, lately.
Alibaba’s IPO is also a win for Yahoo because it has stated publicly that it plans to sell about 140 million shares in the offering. That’s a little more than 25% of its total Alibaba shares.
Bottom line: Yahoo could wind up reaping between $10 billion to $12 billion before taxes, when it’s all said and done, according to several media reports.
The big question is, ‘What does Yahoo plan to do with all that money?”
5) What about Alibaba’s founder, Jack Ma?
Jack Ma, the former English teacher who built the company out of his humble apartment, is already the richest person in China.
In fact, he’s the biggest individual investor with a 9% stake.