Mega-IPO to rekindle the 'bromance' behind Alibaba's rise

Wed Aug 27, 2014 6:41pm EDT
 
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By Paul Carsten

BEIJING (Reuters) - Masayoshi Son's nose for an investment has turned a $20 million start-up punt on Alibaba into a stake worth maybe $50 billion or more as the Chinese e-commerce giant co-founded and led by Jack Ma heads to what could be the biggest U.S. tech IPO of all time.

Son, CEO of Japanese telecoms firm SoftBank Corp, also put money into a young Yahoo Inc, co-founded by Jerry Yang, in 1995, and Yahoo's subsequent investment in Alibaba saw Ma, Son and Yang build Alibaba Group Holding Ltd [IPO-BABA.N] into one of world's biggest internet companies as China's e-commerce market took off.

"It was the look in his eye, it was an 'animal smell'," said Son of his decision to back Ma when they first met in 2000. "It was the same when we invested in Yahoo ... when they were still only 5-6 people. I invested based on my sense of smell," he quipped in a group media interview in May.

Under pressure from investors, Yang quit Yahoo in early 2012 and gave up his seat on Alibaba's board. He is now a founding partner of AME Cloud Ventures, a San Francisco venture fund.

But next month, the three poster boys for Asian technology entrepreneurship, bound by a shared ambition and a taste for sushi and golf, are set to be reunited on Alibaba's board following the firm's long-awaited New York IPO.

For potential IPO investors, the reunion - Yang will be an independent director, while Son will be a director and Ma the executive chairman - is likely to further tighten Ma's control over the company as Son and Yang tend to follow his direction, former Alibaba, SoftBank and Yahoo insiders said.

SoftBank has a 34 percent stake in Alibaba, and Yahoo owns 23 percent. Son has said SoftBank doesn't plan to sell down its Alibaba stake in the IPO, while Yahoo may sell up to about 16.5 percent of Alibaba.

Alibaba, SoftBank and a spokesman for Yang declined to make Ma, Son and Yang available for interview for this article.   Continued...

 
SoftBank Corp Chief Executive Masayoshi Son attends a news conference in Tokyo May 7, 2014.   REUTERS/Toru Hanai