Surging profits in 2013, sales of goods greater than Amazon and eBay combined make the IPO filing of Alibaba and its financial disclosures on Tuesday one of the largest to enter the U.S. arena. It is according to the financial experts on Wall Street a capital value higher than IBM with an estimate of over $200 billion, reports The New York Times.
What is the outlook for Alibaba and mainstream America and what is the impact on Silicon Valley? Alibaba has been on U.S. soil buying into companies and board seats. The vision is to become the largest world's largest consumer market.
It needs the U.S. market to conquer its goals for e-tailer to the world. The purchase of a 39 percent stake for $202 million last October into Shoprunner provides the insight into an Amazon. It will provide valuable training in marketing to distribution to building relationships. China cannot provide the next level for Alibaba.
Currently Alibaba makes it money from two of its websites that are the dominate e-commerce in China. The Taoboa is an online bazaar of a scattering of fresh groceries to Home Depot like home supplies, pets and concert tickets. The second is Tmall which is an online store of well-known brands.
In the latter part of 2013 its mobile device sales jumped from 7.4 percent to 19.4 percent. It challenges Facebook which tracks its sales in breakdown from device type. More of a financial breakdown will be required to stir investors into the purchase of the IPO at offering. That is a few months away, as yet.
The actual IPO strategy is with executive vice-chairman and IPO architect Joe Tsai. His strategy as he told Reuter last March is that Alibaba will have money from the IPO to purchase more acquisitions with stock. The company plans to open an office in San Francisco for its U.S. base of headquarters. There is currently a U.S. investment team working since last Oct. out of a Santa Clara office temporarily. It is headed by Peter Stern, a former Credit Suisse banker.
"Having a liquid currency is very, very helpful," Tsai said in an interview. "We'll be sticking very close to our knitting, staying very true to our core business, e-commerce."
Sales today makes Alibaba, China’s largest online retailer, with volumes that second only to world-wide competitor Walmart. As it moves toward the IPO it will be expected to rival Facebook’s $16 billion infusion of cash offering. Founder Jack ma owns 8.9 percent of the company and he will become a technology titan after the IPO.
Jack Ma became interested in the Internet in 1995 and found certain information and products lacking, so he and a friend created a website for information and translation. Ma founded Alibaba four years later. At age 49 he has come late to the Tech Titan game. His beginnings were as an English teacher. He is the opposite of a Steve Jobs, Bill Gates or Mark Zuckerberg in age start-up and style.
“He effectively represents millions of people who now depend on Alibaba for their livelihood,” said Duncan Clark, chairman of BDA China, a consulting firm on consumer and digital sectors. He is an acquaintance with Ma since the late ‘90’s. Because of the millions of people’s lives he affects, Clark considers him a politician with a small “p”.
He is bringing change to China. Ma wrote in China’s, The People’s Daily, the official newspaper of the Communist Party last June, “The finance industry needs a disrupter, it needs an outsider to come in and carry out a transformation.” He is a private businessman and entrepreneur who is changing the flow in China.