Alibaba Group Holding Ltd. plans to list its shares on the New York Stock Exchange, cementing the 222-year-old market’s newfound strength in technology companies. The decision is a blow to the Nasdaq Stock Market which was competing to become the venue for what could be the largest-ever IPO in the U.S. Alibaba named the exchange in a filing today, saying it plans to use the ticker “BABA.”
For Alibaba, picking Intercontinental Exchange Inc.’s NYSE would also make it a standout on the Big Board as the third-largest technology company listed there. With an estimated value of about $168 billion, according to a survey of analysts in April, Alibaba would rank behind only International Business Machines Corp. and Oracle Corp. among technology companies listed on the NYSE, data compiled by Bloomberg show.
“The momentum shifts back and forth between the two exchanges as far as IPO wins, and now it’s shifted back to the NYSE,” Richard Repetto, an analyst at Sandler O’Neill & Partners LP in New York, said in a phone interview.
Alibaba, which filed for the IPO in May, is looking to sell about a 12 percent stake, people familiar with the matter have said. That could have it raising as much as $20 billion.
People walk through Alibaba.com Ltd.'s headquarters in Hangzhou.
The decision highlights Nasdaq OMX Group Inc.’s struggles to
attract the largest technology debuts. NYSE hosted 22 of the 37 U.S.
technology and Internet IPOs in 2013, headlined by Twitter Inc.’s
offering, and has already won Candy Crush-make King Digital
Entertainment Plc’s listing this year. Nasdaq’s Reputation
Rob Madden, a spokesman for Nasdaq, declined to comment.“We are pleased to welcome Alibaba Group to the New York Stock Exchange where they will join our network of the world’s best companies and leading brands,” NYSE’s Eric Ryan said in a statement.
Nasdaq built its reputation in the 1980s and 1990s as the home of technology companies such as Microsoft Corp. and Intel Corp. Since 2012, it’s battled negative perceptions after Facebook Inc.’s botched IPO led to investor confusion, trading delays and millions of dollars of losses for brokerage firms. NYSE and Nasdaq are currently the only two U.S. exchanges that list companies.
“Alibaba is probably going to be a big offering, so they want somebody that they think can control it better and avoid the headache Facebook had,” Frank Ingarra, head trader at Greenwich, Connecticut-based NorthCoast Asset Management LLC, said by phone.
Swinging Pendulum
While Nasdaq, which is the listing venue for Google Inc., Apple Inc., and Alibaba shareholder Yahoo! Inc. (YHOO), was once the obvious choice for an Internet upstart, NYSE has been chipping away at its lead. Out of the 10 technology and Internet IPOs that priced during the first quarter in the U.S., seven chose to list on the NYSE, according to data compiled by Bloomberg.Besides the reputational gain from winning Alibaba, money is at stake, too, as NYSE and Nasdaq collect fees from their listed companies. A high-profile win such as Alibaba could help lure other companies to a venue.
From 2001 through 2011, Nasdaq won 122 technology and Internet IPOs and NYSE scored 42, data compiled by Bloomberg show. LinkedIn Corp., Pandora Media Inc. and Yelp Inc. have all selected the NYSE for IPOs since. From the start of 2012 through March 31 of this year, NYSE won 45 technology listings that raised $8.8 billion, while Nasdaq secured 35 that raised $20.7 billion, an amount padded by Facebook’s $16 billion debut.
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