One of the questions in the online business world for the last year was were would Chinese Internet giant Alibaba decide to list – the US or Hong Kong?
Listing in Hong Kong would have been a coup for the Chinese territory and possibly marked a shift in Asian web properties away from listing in the United States.
As it turned out, Hong Kong’s listing rules were too stringent for Alibaba’s Jack Ma who wanted to retain a controlling stake in the business in a way that isn’t allowed on the HK stock market so the company is going to the US for its IPO.
Jack Ma and Ailbaba’s rise is a fascinating story partly told by Porter Erisman in his Crocodile on Yangtse who was interviewed for Decoding the New Economy last year.
Alibaba’s listing on a US exchange, the announcement isn’t clear if its the NASDAQ or NYSE, will also be a test for the valuation of Asian internet properties in Western stockmarkets.
With revenue of around a billion dollars this year, a Google like P/E of 30 would see the company valued at around $30billion, although there could be arguments that a Facebook like valuation of 100 times earnings might be more appropriate.
Regardless of how much it is valued, Alibaba is going to be blazing a trail for Asian and, specifically, Chinese companies over the next few years.