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Pre-share sale open sesame from Alibaba

Pre-share sale open sesame from Alibaba
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Alibaba – the powerhouse of e-commerce in China – has been laying out its company wares for investors.

The just-released prospectus for its highly-anticipated share sale revealed the company handled over 172 billion euros worth of transactions last year – more than Amazon and eBay combined.

Little known outside China, Alibaba has wide ranging activities, making it very attractive to investors.

Sam Hamadeh, Chief Executive Officer of business research firm PrivCo, explained: “It has created essentially the Google of China. It’s created the Groupon of China. It’s created the of China, the eBay of China and the PayPal of China. So if you can imagine one company, all in one stock, all at once, and in the fastest growing economy in the world, that’s what Alibaba is. That’s why this matters so much.”

Turnover was much smaller than some of the other top names of internet trading – at the equivalent of just 4.7 billion euros last year – but it boasts 231 million active users across its three main Chinese online marketplaces. That compares with Amazon’s 237 million worldwide.

Alibaba has recently created English-language websites for all of its services making it a potential rival to the likes of Google, Amazon, eBay, Apple’s iTunes, Facebook and Twitter.

Sam Hamadeh’s opinion: “A lot of these companies need to be concerned because Alibaba intends to become a household name in the West.”

Traditionally the Nasdaq was chosen by technology companies for their initial public offerings of shares, but after Facebook’s problems the New York Stock Exchange has been gaining ground on that front.

Alibaba has not yet said where it will list, not the number of shares it will offer, or the price.

Analysts expect it to raise more than $15 billion (10.7 billion euros) and think it could top Facebook’s share sale.

The bulk of the proceeds will go to Yahoo, which bought a 40 percent stake in Alibaba in 2005 for $1 billion.

with Reuters and AP