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It has been widely estimated that the Alibaba IPO will be one of the largest IPOs of all-time – possibly even the largest IPO in U.S. history.
But the investment research firm Morningstar upped the ante this week when it declared that the Alibaba IPO could raise an incredible $26 billion for the Chinese e-commerce firm. Morningstar also projected that Alibaba's equity value could reach $220 billion.
By raising $26 billion, Alibaba would smash the record for largest IPO currently held by the Agricultural Bank of China, which raised $22.1 billion in 2010. The largest ever U.S. IPO took place in 2008 when Visa Inc. (NYSE: V) raised $19.65 billion.
While not everyone is as bullish as Morningstar, there are plenty of indicators that suggest the Alibaba IPO will indeed be the biggest IPO in U.S. history and could even rival the $22.1 billion from the Agricultural Bank of China…
What's Pushing the Alibaba IPO Price Higher
The first reason Morningstar seems so bullish is Alibaba's diversity as a company.
"We believe Alibaba's IPO should be on the radar screens for investors seeking exposure to China's emerging middle-class consumers as well as its e-commerce, technology, and logistics industries," the report said.
Alibaba has acquired numerous companies throughout the last year in various industries including traditional retail, media, gaming, web portals, logistics, and even professional soccer.
The company, and founder Jack Ma, are determined to move into various industries, even if it's an industry Alibaba doesn't have much experience in.
Many questioned Ma's $192 million purchase of the Chinese soccer team Guangzhou Evergrande Football Club, but according to Ma, those types of acquisitions fit the company's business model. For instance, Ma had no experience with e-commerce before entering the industry.
"I think not understanding soccer doesn't matter. I also didn't understand retail, e-commerce, or the Internet, but that didn't stop me from doing it anyway," Ma said.
But the biggest bullish factor is the staggering size of the Chinese e-commerce market itself…