Alibaba Group Holding Ltd.’s executives discussed a range of topics, from its governance model to its profit margins, as they began pitching the company’s initial public offering at New York’s Waldorf Astoria hotel.
The event was attended by some 800 investors, one person who was in attendance estimated. Eating boxed lunches, they watched a video presentation before they heard from company founder Jack Ma, and then asked questions of other executives including Chief Financial Officer Maggie Wu and Vice Chairman Joseph Tsai, another attendee said, asking not to be identified as the event was closed to the press.
The lunch was the first in nearly 10 days of meetings that
Alibaba will host as it tries to build demand for a record-breaking IPO. The Chinese e-commerce company is seeking as much as $21.1 billion from the sale, valuing itself at up to $162.7 billion -- which would make it the third-most valuable Internet company traded in the U.S. after Google Inc. and Facebook Inc.
The executives still have much more work ahead as they seek to convince investors to back the offering: Two who attended yesterday’s event and asked not to be identified said they would have liked more specifics on the company’s international expansion plans, for example.
Paul Kranhold, a spokesman for Alibaba at Sard Verbinnen & Co., declined to comment on the roadshow.
Yahoo’s Gain
Alibaba executives started their day at Citigroup Inc. at 6 a.m. in New York, where some 300 salespeople from the investment banks were given a training session about the company, two people with knowledge of the matter said. By about 11:45 a.m. -- nearly an hour before the event was due to begin -- a line snaked around the lobby of the Waldorf, as investors waited for the elevator to the 18th-floor room where the lunch was held.That line persisted through 12:30 p.m., causing the meeting to begin about 30 minutes late. Yahoo! Inc. (YHOO), which is selling as much as $8 billion of Alibaba’s shares in the IPO, rose yesterday in New York. The Sunnyvale, California-based company’s stock climbed 5.6 percent, with more than half of the gain coming after Alibaba’s meeting was scheduled to begin.
Dougan’s Introduction
Investors filed into a large conference room, where they were given bags with sandwiches and bright orange prospectuses. Brady Dougan, the chief executive officer of Credit Suisse Group AG, introduced the event and was followed by Ma, who spoke about the company’s vision to make business easier. Ma may not attend all of the group meetings on the roadshow, one person with knowledge of the schedule said.Other executives then presented slides that highlighted key figures from the prospectus. Credit Suisse’s head of Internet investment banking, Imran Khan, facilitated the investor inquiries, which were submitted electronically. At the end of the presentation, the executives allowed investors in the audience to ask their questions as well.
Before buying shares in Alibaba, however, investors must weigh the risks. The company has a corporate governance arrangement that gives 30 individuals the ability to nominate a majority of the board. Chinese restrictions on foreign ownership in their Internet companies requires Alibaba to use a variable interest entity, or VIE, structure, which could pose risks to shareholders if the government revokes the license.
Alibaba has 20 banks and brokerages listed as working on the IPO -- from JPMorgan Chase & Co. to Singapore’s DBS Group Holdings Ltd. and Japan’s Mizuho Financial Group Inc. The roadshow will include stops in Boston and San Francisco this week and Hong Kong early next week, a schedule obtained by Bloomberg News shows.
For those investors who cannot attend one of the in-person meetings, an online presentation by the company is hosted by Tsai and Wu. It begins with a history of the company’s beginning as a marketplace to connect buyers and sellers. Tsai walks the viewer through Alibaba’s growth strategy, while Wu discusses the financials.
Bookbuilding Process
The Hangzhou-based company is targeting Sept. 18 as the date to determine a final price for the shares, which would begin trading the following day.Alibaba will use a bookbuilding method for its IPO, where investment bankers collect non-binding bids from fund managers to assess demand at each price point within the marketed range. Alibaba and shareholders, including Yahoo and co-founders Tsai and Ma, plan to sell 320.1 million shares for $60 to $66 apiece, according to a regulatory filing last week.
Deutsche Bank AG, Goldman Sachs Group Inc. and Morgan Stanley are also managing the Alibaba IPO.
No comments:
Post a Comment