The Alibaba IPO is projected to be one of the biggest public offerings of all time, and investors will get a closer look at the IPO when the company officially files its prospectus. That's expected to happen within the next week.
Alibaba's IPO will easily be the biggest IPO of 2014, as the deal is expected to raise more than $15 billion. According to Renaissance Capital, all 91 companies that have gone public thus far in 2014 have raised a combined $18.4 billion.
Because the Alibaba deal will be so huge, there are numerous factors to consider when weighing Alibaba as an investment. Here are the 10 facts every investor needs to know about the Alibaba IPO…
10 Things to Know About the Alibaba IPO
- Alibaba Dominates China's E-Commerce Market: Alibabais the largest e-commerce company in China, which is the world's second largest e-commerce market. According to the research firm McKinsey & Co., e-commerce in China is expected to be a $420 billion industry by 2020, up from $210 billion in 2012. Alibaba owns a network of sites. One site is similar to Amazon.com Inc. (Nasdaq: AMZN), another is comparable to eBay Inc. (Nasdaq: EBAY), and one is like PayPal. If you're making an online purchase in China, the odds are high that you're using an Alibaba-owned website. In 2013, the transaction volume from Alibaba's network of sites was one-third larger than Amazon and eBay combined.
- Alibaba's Profits Are Soaring: When Yahoo! Inc. (Nasdaq: YHOO) reported earnings last week, it also reported Alibaba's most recent financials because it owns a 24% stake of the company. The report detailed that Alibaba's revenue had jumped 66% to $3.06 billion in Q4 of 2013 (the most recent quarter available), up from a 51% increase in Q3. Additionally, Alibaba's profits more than doubled in the fourth quarter, reaching $1.35 billion.
- This Could Be the Largest Tech IPO Ever: The record for largest U.S. tech IPO was set in 2012 when Facebookraised $16 billion. In February, analysts polled by Reuters estimated Alibaba could raise $14 billion in its IPO. Since then, the company has spent billions of dollars acquiring various companies. Acquisitions and strong revenue growth have some analysts estimating that the IPO will top FB's $16 billion.
That's not all there is to know about the Alibaba IPO; check out these seven remaining must-know facts…