Updated, 8:55 p.m. | It began as a small Internet upstart in China, but now the Alibaba Group is preparing for a splashy debutante party that will stretch from New York to Hong Kong and back again.
The company, which runs two huge online marketplaces in China, plans to kick off a long-awaited roadshow for potential investors on Monday. It is the start of a formal effort to drum up interest in what could be the biggest stock market debut ever in the United States if Alibaba succeeds in raising its target goal of $21.1 billion.
The whirlwind tour, which will encompass 100 meetings in 10 days, will begin not in Hong Kong but in New York, where shares of the company are expected to begin trading on Sept. 19. Two teams of senior executives, code-named red and orange, will travel with advisers across the United States and then to Europe, the Middle East and Asia.
The sheer breadth of the trip highlights not only the outsize ambitions of Alibaba executives as they seek to establish their company as a global giant on par with Google and Amazon.com, but also the hunger of investors eager for a piece of the booming business. Even before Alibaba filed for an initial public offering in May, money managers cleared space in their portfolios for shares in the company.
An amended prospectus on Friday revealed just how big Alibaba will be once it is traded publicly. At the midpoint of its expected price range of $60 to $66 in American depositary shares, the company would be valued at nearly $156 billion. That is not far behind Amazon.com and more than eBay, LinkedIn and Twitter combined.
Should the company's initial public offering hit the top end of its price expectations, it will have surpassed the market debuts of Facebook, General Motors and Visa.
While poised to become a new behemoth, Alibaba cast itself as a champion of small business in its roadshow materials. In an online video that featured animation and music, Joseph C. Tsai, the executive vice chairman of Alibaba, outlined the company's plans to make people "meet, work and live at Alibaba." And in a letter to investors on Friday, Jack Ma, Alibaba's chairman and co-founder, wrote, "Our proposition is simple: We want to help small businesses grow by solving their problems through Internet technology."
The price range filed on Friday gives investors an important hook for valuing Alibaba. At $66 a share, the company would be trading at around 40 times its earnings for the 12 months through the end of March. That ratio is high compared with the broader stock market. But 40 times is below that of other fast-growing technology companies. Facebook's shares, for instance, traded at over 80 times its earnings in the 12 months through June.
Alibaba's profit margins are very strong; the company makes 43 cents of operating profit for every dollar of revenue that it earns. Its earnings are also growing rapidly. As a result, investors may be willing to pay considerably more than 40 times earnings for Alibaba's stock.
"It's one of the largest e-commerce companies on the planet, and it's still growing faster than almost any other e-commerce company," said Sameet Sinha, an analyst at B. Riley & Company.
If demand seems strong before the offering, investment bankers can increase the price range, as was the case in the Facebook and Twitter offerings. But the bankers may want to underprice the shares somewhat to increase the chance that they may rise sharply on their first day of trading.
One element that remains unclear, Mr. Sinha said, is whether investors will be wary of a corporate governance structure that concentrates power in the hands of the company's partnership, a select group of insiders like Mr. Ma. Already, the company has embarked on an acquisition spree that included an impromptu purchase of a stake in a major Chinese soccer team and a deal for a stake in a Hong Kong film studio that has since disclosed suspicious accounting practices.
Still, the stock sale is expected to generate a bonanza for the small group of investors who are selling shares. The single biggest seller is Yahoo, which is contractually obligated to sell a portion of its holdings, and which would reap some $7.7 billion at the midpoint of the price range.
Mr. Ma, who oversaw Alibaba's rise, will see his net worth skyrocket as well. He will sell only a small portion of his holdings, retaining a stake of nearly 8 percent. At the midpoint of the range, he could gain $803 million in the I.P.O., and his remaining shares would be valued at nearly $12.2 billion.
His longtime lieutenant Mr. Tsai will also see a huge jump in his net worth as well, despite selling a small portion of his shares. His remaining holdings would be valued at roughly $5 billion.
What is perhaps most striking is that other than Yahoo, few shareholders are selling many shares at all. That suggests a belief that Alibaba has significant room to grow, something that the company itself has emphasized. Potential investors and analysts have long said that the company, along with rivals like Tencent and the search engine Baidu, represent a coming-of-age of the Chinese Internet industry.
The coming offering is the result of years of work, as Alibaba has reshaped its internal structure and hired advisers to help prepare for the stock sale. This year, Alibaba hired an unheard-of six lead underwriters — Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Citigroup — to help plan the undertaking.
Each bank team, led by senior deal makers, focused on several major tasks. Credit Suisse and Morgan Stanley, for instance, worked on the prospectus and will supervise the "lockup" period after which current investors can sell shares, while JPMorgan worked on the company's valuation and offering structure.
Goldman was awarded the role of stabilization agent, meaning it is responsible for making sure that the early trading after the I.P.O. goes well.
For the banks, the chief incentive driving them is the prestige of helping shepherd one of the biggest initial offerings in history, rather than profits. The banks are expected to share in an underwriting fee of about 1 percent, according to people with knowledge of the matter, or just over $2 billion if the stock sale prices at the high end. All but one lead underwriter would reap about $31 million.
The breadth and rigorousness of those preparations will be put to the test next week, when Alibaba finally begins its road show in Manhattan. Early on Monday, executives will brief salespeople from the main underwriters on how to best pitch the company to their clients, before decamping for the first of a dizzying series of meetings. Then executives will gather for what is expected to be a standing-room-only lunch at the Waldorf-Astoria in Midtown Manhattan.
At various points, the executives will split into the orange and red teams, named after Alibaba's primary corporate colors, according to people with direct knowledge of the schedule. The orange team will be led by Mr. Tsai, the vice chairman, and Jonathan Lu, the chief executive; the red team will include Maggie Wu, the company's chief financial officer, and Daniel Zhang, its chief operating officer. Mr. Ma is expected to appear at a few meetings. In New York, executives will be meeting with money management giants like BlackRock and Oppenheimer.
On Tuesday, they will head to Boston to see huge mutual fund managers like Fidelity and Wellington Management. The teams will then travel across the country — Baltimore, Denver and San Francisco are on the itinerary — before heading abroad. Then the teams will visit London, the Middle East, Singapore and Hong Kong.
If all goes according to plan, executives will return to New York by Sept. 18 for the crucial pricing of the shares. Alibaba would begin trading the next day on the New York Stock Exchange, under the ticker symbol BABA.
Peter Eavis and Alexandra Stevenson contributed reporting.
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