E-Commerce Giant Alibaba Hits Road to Promote Massive IPO

Chinese e-commerce giant Alibaba Group Holding Ltd's management kicked off its two-week IPO marketing blitz on Monday with an early morning presentation to the combined sales forces of its six underwriters.

Alibaba is seeking to raise more than $21 billion in an initial public offering that will value the company at up to $163 billion and rank as the largest-ever technology debut in the United States. Alibaba expects to price the IPO at $60 to $66 per American Depository Share. It will list shares on the New York Stock Exchange.

At 6 a.m. EDT (1000 GMT), about 300 salespeople for the six banks underwriting the offering gathered at Citigroup Inc's offices on Greenwich street in Lower Manhattan for an hour, according to a source familiar with the meeting.

Besides Citigroup, Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc, JPMorgan Chase & Co and Morgan Stanley are joint bookrunners for Alibaba's IPO.

Alibaba Executive Vice Chairman Joe Tsai fielded questions and did the main presenting to the sales force, according to the source. The point of the meeting was to get all the bookrunners of the IPO on the same page to help them market the shares, the source said.

An Alibaba representative declined to comment.

Investors will get a chance to hear about Alibaba at a luncheon at the Waldorf Astoria hotel in New York later on Monday. Credit Suisse Chief Executive Officer Brady Dougan is expected to introduce management on behalf of all the underwriters. Alibaba will then present, with most of the time dedicated to a question-and-answer session, said a separate source familiar with the matter.

Industry analysts had expected Alibaba to try for a valuation in excess of $200 billion, ranking it among the 20 largest publicly traded companies in the United States. The multi-city marketing effort will determine whether Alibaba, widely seen as one of the hottest technology IPOs of the year, will price above the initial range and come closer to that valuation.

The company has attracted its share of controversy, which has kept some investors on the sidelines. Some have said they were cautious about conflicts of interest between founder Jack Ma's role as a steward of the company and his investment interests elsewhere.

Alibaba's governance has also become an issue with major shareholders Yahoo Inc and Softbank Corp, which both objected when the company hived off lucrative payments unit Alipay.

In the United States, Alibaba has failed to draw the kind of interest from retail investors that preceded other hot Internet IPOs such as Facebook Inc.

But some investors say Alibaba's fundamentals outweigh the risk of investing in a company with an unfamiliar governance structure.

Alibaba accounts for about 80 percent of all online retail sales in China, where rising Internet usage and an expanding middle class helped the company generate gross merchandise volume of $296 billion in the 12 months ended June 30. Revenue in the June quarter increased 46 percent to $2.54 billion from a year earlier, faster than the 38.7 percent growth in the previous quarter.

Alibaba is selling 123.1 million of the 320.1 million ADS shares slated for the IPO. Shareholders including Yahoo, Ma and Tsai are offering the remainder.

The company plans a Tuesday presentation at the Four Seasons hotel in Boston, according to a person who saw an invitation.

© Thomson Reuters 2014