Alibaba talks corporate governance to potential IPO investors

Mon Sep 8, 2014 7:11pm EDT
 
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By Liana B. Baker and Jessica Toonkel

(Reuters) - Alibaba Group Holding Ltd IPO-BABA.N founder Jack Ma on Monday surprised potential investors at a standing-room only event in New York by addressing governance concerns over the Chinese e-commerce giant, including a controversial 2010 spin-off of its online payment service.

Ma made the remarks at a luncheon at the Waldorf Astoria hotel in New York in front of hundreds of hedge funds, mutual funds and other institutional investors, as the company kicked off a two-week, multi-city marketing blitz for its initial public offering.

Alibaba was expecting about 500 investors to attend the first stop on the roadshow, but some 800 showed up, forcing some into overflow rooms.

Alibaba is seeking to raise more than $21 billion in the largest-ever U.S. technology IPO, valuing the company at up to $163 billion. It expects to price the IPO at $60 to $66 per American Depositary Share, which are scheduled to start trading on the New York Stock Exchange later this month.

Industry analysts had expected Alibaba to try for a valuation in excess of $200 billion, ranking it among the 20 largest publicly traded companies in the United States. The marketing effort, which will take Alibaba on a globe-trotting tour, will help determine whether the company will price above its initial range and come closer to that valuation.

Several investors who spoke with Reuters before and after the event said they went into the presentation with a series of questions about Alibaba, ranging from concerns about its corporate governance and transparency, to plans for U.S. acquisitions and growth. They said they did not learn anything new during the lunch - of boxed turkey sandwiches - but came away feeling the event was well-choreographed.

Akram Yosri, a managing partner at 3iCapital Group, said he had hoped to find out more about how the company planned to grow globally, and particularly how it plans to compete with Amazon.com Inc (AMZN.O: Quote) and eBay Inc (EBAY.O: Quote) in the United States.

"Did I learn anything? Absolutely not," he said.   Continued...

 
Jack Ma, the founder and executive chairman of Alibaba Group Holding, leaves following the company's road show in New York September 8, 2014. REUTERS/Brendan McDermid