|Jack Ma, founder of Chinese e-commerce giant Alibaba Group Holding Ltd.
Alibaba, China's e-commerce giant, has filed an
initial public offering (IPO) document with the US Securities and Exchange
Commission (SEC) with plans to raise $1bn.
Announcing the IPO in an internal letter to employees, Ma Yun (known internationally as
Jack), founder and chairman of Alibaba, said, "Becoming a listed company
has never been our goal. It is a tactic and means to realize our mission."
Noting that being listed in the United States will expose Alibaba to challenges
in the global financial market, Ma said: "Not all companies have the
opportunities to face such global challenges. We are honoured to be one of them."
The Wall Street Journal says the IPO would value the company at more than
$100bn, confirming the scale of its e-commerce operations ahead of what is
expected to be one of the largest stock listings in history.
The filing showed that Alibaba is growing quickly and is very profitable, but
the 2,300-page document didn't include some key information, such as the revenue
for Alibaba's main marketplaces, how much the company makes from advertising or
who will serve as the company's new directors after the IPO.
Revenue rose 57% in the final nine months of last year,
and Alibaba kept more
than 43 cents of each dollar of revenue as net income.
Alibaba valued itself at roughly $109bn in April, based on disclosures in
the document about the numbers of shares outstanding and its internal estimate
of the value of each share.
Including stock-based compensation and the conversion of certain preferred
shares, the valuation is $121bn.
The Journal says both figures exclude the value of any shares Alibaba will sell in its initial
The company could seek a higher valuation in the share sale. Analyst estimates
have ranged from $136bn to $250bn.
The filing showed the company had 231m active buyers
in 2013. A total of $248bn was spent on Alibaba's three retail sites in China
last year, roughly equivalent to the annual economic output of Finland.
Ma founded the operation in 1999 and Softbank of
Japan owns 34.6% of the chares while Yahoo! owns 22.6%.
In the letter to Alibaba employees, Ma likened the
IPO to a stop at a gas station. Below is a
translation of the letter obtained by the WSJ's China Real Time.
New Opportunities, New Challenges, a New Journey
In a few minutes we will officially submit our initial registration
statement to the U.S. Securities and Exchange Commission. This means Alibaba
is about to enter a new era of challenges.
Fifteen years ago, 18 founders of Alibaba came together determined to create
a Chinese company that could be counted as a global Internet company, with
hopes that it would become one of the world’s ten largest internet companies
and that it would last for 102 years. Fifteen years later, we are lucky to
still be here. We live better now than we could have imagined back then.
We understand it’s not how hard we worked or how smart we are that has
gotten us where we are today, but the fortune of the era we live in. It’s
thanks to the Internet, thanks to vibrant young people, thanks to a group of
entrepreneurs who accompanied each other on the road to their dreams, thanks
to the reform and opening of this country…
We know well we haven’t survived because our strategies are farsighted and
brilliant, or because our execution is perfect, but because for 15 years we
have persevered in our mission of “making it easier to do business across
the world,” because we have insisted on a “customer first” value system,
because we have persisted in believing in the future, and because we have
insisted that normal people can do extraordinary things.
After we release the first draft of the company’s prospectus we will
encounter all sorts of opinions. Over 15 years we’ve had lots of support,
but behind the praise and applause, we have also faced criticism, blame and
doubts. The best way to respond to all of this is to maintain a thankful and
reverential attitude, and just as in the past, we must continue to follow
our task of “making it easier to do business across the world,” we must
remain dedicated to our work, we must continue to help small businesses
succeed, and we must allow time and the results of our work speak for
A public listing has never been our goal. It is one important strategy and
vehicle for fulfilling our mission. It is a gas station along the road to
the future. But Aliren should be conscious that, lying behind the massive
allure of the capital market, there is unparalleled ruthlessness and
pressure. In this market, only a small number of outstanding enterprises can
maintain a gallop. Alibaba will undoubtedly be confronted with unprecedented
challenges and pressure due to the scale (of the listing), expectations,
national boundaries, culture clashes, and regional politics and economics.
Only by continuing to persevere and believing what we believe will we be
able to survive for the next 87 years of hardship and the pressures and
temptations. We are lucky and honored to be among the few companies capable
of to face such global challenges.
After we go public, we would continue to adhere to the principle of
“customer first, employee second, shareholder third.” We believe that, no
matter what difficult decisions we face whether now or in the future,
sticking with our principles is the best way to respect and protect the
interests of all parties. In one sense, a public listing empowers us to
better help customers, support employees and guard the shareholders’
Finally, I want to remind all of you to strictly comply with securities
regulations and the group’s confidentiality rules, and not to make any
public comment on the prospectus. All interviews should be handled through
the group’s public relations department.
The human resources department will soon send out details of stock issues
for each individual employee. This is truly a pleasing thing. We must stick
to our principle of “living seriously and work happily.” Please work,
contribute and donate to the society to the extent you can while taking care
of your own wealth, yourself and your family. Thank you all very much.
“It is by the odes that the mind is aroused. It is by the rules of propriety
that the character is established. It is from music that completion arises.”
Aliren, the past 15 years have been difficult and exciting. Every single day
of the future is bound to be extraordinary and complicated. If we don’t put
in the effort today, we might not see the sunshine the day after tomorrow.
No business runs smoothly all the time. As we persevere in persevering, we
must change for the customer, we must change for the world and we must
change for the future.
Chairman of the Board, Alibaba Group