Countdown to the Alibaba IPO Date: 10 Must-Know Facts Before the Big Day

The Alibaba IPO date could be set for sometime early next month, and the hype continues to grow surrounding what may be one of the largest initial public offerings ever.

To make sure you haven't missed any of the facts surrounding this epic IPO, we put together the most important details of why Alibaba is such a big deal to U.S. markets, to the 2014 IPO landscape, and to your money...

10 Things to Know Before the Alibaba IPO

Alibaba IPO Could be the Largest Ever: It has been widely estimated that the Alibaba IPO will be the largest Internet IPO of all time, surpassing the $16 billion raised by Facebook Inc. (Nasdaq: FB) in 2012. But the estimates don't stop there. Bloomberg has projected that Alibaba could raise $20.16 billion. That would make it the largest U.S. IPO ever, topping the $19.65 billion Visa Inc. (NYSE: V) raised in 2008.

The investment research firm Morningstar has released the most bullish estimate yet. They've pegged the IPO for $26 billion, which would surpass the $22.1 billion raised by the Agricultural Bank of China in 2010 as the largest IPO in global history.

Alibaba's Valuation Is Rising: Similar to the IPO total, the valuation estimates for Alibaba continue to rise. The general consensus is that Alibaba will be valued at $168 billion, but other firms have released higher estimates. Last week, Piper Jaffray analyst Gene Munster projected that the Chinese e-commerce giant is worth $221 billion, including cash.
Alibaba IPO Date
And that still wasn't even the highest estimate. Before that, financial research company Sanford C. Bernstein estimated Alibaba's value at $230 billion.

Alibaba's Disruptive Leader Is on Fire: Alibaba's former founder and current Chairman Jack Ma had an inauspicious start. Formerly a teacher, Ma had no computing or e-commerce experience. But that didn't stop him from creating China's largest e-commerce company.

"Innovation in many industries has been triggered by outsiders," Ma wrote in a June 2013 article in the Communist party's official newspaper the People's Daily. "The finance industry needs a disrupter, it needs an outsider to come in and carry out a transformation."

And inexperience hasn't stopped Ma from bringing Alibaba into various markets. Ma and Alibaba have purchased logistics, retail, commerce, and media companies in the last year. He also purchased a professional soccer team in early June.

Chinese E-Commerce Is Exploding: "Alibaba is the dominant e-commerce player in a marketplace - China - that's seeing incredible growth in online commerce," Money Morning's Executive Editor Bill Patalon said. "According to the latest research I've seen, e-commerce in China is projected to hit $540 billion by 2015, and that's just for starters. By 2020, China's e-commerce market will be worth more than the United States, the United Kingdom, Japan, Germany, and France combined. So we know that growth is coming... and we know that Alibaba is the No. 1 gun."

"Look at it another way: the number of consumers and business folks connected to the Internet in China - whether you're talking about computers, tablets, or smartphones - is bigger than the entire U.S. population. And the government there is actually pushing growth. Beijing has mandated that 1.2 million folks - 85% of its population - will have broadband connections (3G or 4G) by 2020."

Money Morning Members - keep reading for six more key points about Alibaba. Non-members, sign up now for instant access to the rest of this Alibaba IPO update (and you'll get ALL our investing analysis, for free)...

Alibaba Revenue and Profits Are Booming: Alibaba officially filed its prospectus in May, and in doing so, provided a look into some of its financials. At the time, the company reported having $5.6 billion in revenue for the fiscal year 2013 (ending March 31), and net income of $1.6 billion. For the first nine months of FY 2014, revenue was $6.5 billion and net income was $3.2 billion.

When Alibaba updated its filing in mid-June, the company reported that revenue growth was 39% and its operating margin was 45% in the previous quarter. That caused some concern since the previous year those figures had been 71% and 51%, respectively.

However, that dip in operating margin needs some context...

China's Mobile Industry Is Growing: Alibaba officials pointed out that operating margins dropped because the company increased spending on advertising the company's mobile business. By all accounts, that's had an impact.

"[N]early 20% of its business comes from mobile devices, which means it oversees about 76% of China's mobile e-commerce," Wired's Ryan Tate wrote in May.

Alibaba is investing in its mobile business during a time when mobile e-commerce is growing. By spending the money now and building that mobile base, the company should be rewarded in the long run.

It's Bigger Than Amazon and eBay: When Alibaba updated its prospectus in June, it gave specifics on the volume of its websites. In 2013, its most popular site, Taobao, handled $177 billion in transactions. Approximately $70 billion exchanged hands over Alibaba's second-largest site, Tmall, during the same time. For perspective, Inc. (Nasdaq: AMZN) handled $100 million and eBay Inc. (Nasdaq: EBAY) handled $54 billion in 2013.

Alibaba IPO facts you must know
Look Out NYSE: Alibaba made an amendment to its IPO filing at the end of June, and announced that it will be listing on the New York Stock Exchange. When the Alibaba IPO comes to the NYSE, BABA will be the third-largest tech company on the NYSE behind International Business Machines Corp. (NYSE: IBM) and Oracle Corp. (NYSE: ORCL). That's based on a Bloomberg survey of analysts from April that estimates BABA's value at $168 billion.

By picking the NYSE, BABA dealt a major blow to the Nasdaq, which has historically attracted tech companies. That trend seems to be fading however, as 22 of the 37 tech and Internet companies that held U.S. IPOs in 2013 chose the NYSE. There were 10 tech/Internet IPOs in 2014's Q1, and seven of them listed on the NYSE.

When Alibaba announced that it would trade on the NYSE, it also announced that it would be choosing "BABA" for its ticker. "Ba" means "eight" in Chinese, which is considered a lucky number in Chinese culture. 

There's No Official Date, But...: Around the same time that rumors began circulating that "BABA" would be chosen as the ticker, it was also rumored that the company could choose Aug. 8, 2014 as its IPO date. With eight being a lucky number in China, the repeating eights of 8/8 seem like a natural choice. The timing of the first full week in August also reportedly coincides with the average IPO timetable.

You Can Profit Now: The best news about this looming IPO is that it has created a major profit opportunity that most investors haven't yet noticed... It's happening now, months before Alibaba hits the market...

In fact, this could be your one and only chance to make the kind of gains normally reserved for the high-net-worth investors and bankers. You can learn more about this Alibaba profit play here.

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