Alibaba IPO: 5 big winners and 5 big losers

According to foreign media reports, Alibaba officially went public on the New York Stock Exchange this Friday. Given that this stock is likely to become the largest IPO in history, there will inevitably be some people and companies involved who will become the most direct winners or losers in such a massive IPO plan. The following are the five biggest winners and losers in Alibaba's IPO, as listed by Time's financial edition:

Winner:

1. Jack Ma, founder and CEO of Alibaba Group

Ma, a former teacher who has transformed himself into a Chinese Internet tycoon, no longer needs to chase Alibaba's IPO's first-day surge. He is already China's richest man, with a fortune of nearly $22 billion, according to Bloomberg data. Ma owns 9% of Alibaba Group, so any share price growth after the IPO will only be the tip of the iceberg for his personal wealth.

Ma Yun's real victory is the retention of power. Because the Chinese government prohibits foreign capital from controlling national strategic assets, Alibaba's IPO adopts an atypical and unconventional equity structure. Because of this structure, Alibaba's investors will not be like Facebook 's investors, where buying shares does not mean gaining control of the company. Ma Yun and his partners will continue to control Alibaba Group and all its assets.

However, investors who purchase Alibaba shares have the right to share in the group's profits. Alibaba is listed in the United States through a holding company registered in the Cayman Islands. This structural relationship is also known as a VIE (variable interest entity).

In fact, the biggest highlight is that through the listing, Jack Ma obtained 25 billion US dollars from the capital market, and at the same time, unlike other companies that go public, he did not need to dilute his equity and lose control of the company. Simply put, Alibaba's listing is like Jack Ma winning the first prize in the Mark Six lottery.

2. Masayoshi Son, Founder and CEO of SoftBank

Masayoshi Son has now become the richest man in Japan, with a personal fortune of about $20 billion, according to Forbes. He should be most thankful for his historic decision to invest in Alibaba.

In 2000, when the technology bubble burst and reached its peak, Masayoshi Son invested $20 million in the company that Jack Ma had just founded and encouraged the latter to persevere through the difficult times.

It was a wise investment. In less than 15 years, Son's $20 million has grown to $55 billion - earning him the nickname "Japanese Bill Gates" in Japan. The gains more than made up for the $70 billion Son lost when the tech bubble burst in 2000.

3. SoftBank and Sprint

Many people have focused on the topic that " Yahoo holds one-fifth of Alibaba's shares." However, we have overlooked the fact that Japan's SoftBank Group holds more than one-third of Alibaba's shares.

For SoftBank, holding Alibaba shares will help the company attract international investors to invest in Chinese companies in an indirect and more diversified way. In addition to holding a large stake in Alibaba, SoftBank is also one of the major operators in the Japanese mobile phone market and holds shares in many technology and media companies around the world, including a 70% stake in US mobile operator Sprint.

Now Japan's SoftBank will have a large amount of cash available for strategic acquisitions to further strengthen Sprint's market position.

4. Snapchat

After the IPO, Alibaba Group will have $25 billion available for acquisitions. Wall Street and Silicon Valley are even making lists to find the most suitable targets.

Among them, Snapchat, a social app that disappears after reading, ranks high.

Although there are reports that the two companies' negotiations on a minority stake ended a month ago, this is likely due to Alibaba's preparations for its IPO roadshow and Snapchat's desire to raise another $20 million from investors such as Kleiner Perkins Caufield & Byers. Snapchat's current market valuation is about $10 billion, so Alibaba still has plenty of room to participate.

However, Alibaba is not the only company with deep pockets that covets Snapchat. Rumor has it that Snapchat has already rejected Facebook's acquisition offer once, and Microsoft is also developing a product with similar functions, Windup, so it is also possible to implement strategic acquisitions. But in any case, as long as Alibaba has the possibility of acquisition, the price of Snapchat will only get higher and higher.

5. ShopRunner

Alibaba has made small investments in a number of small U.S. companies, including search engine Quixey, text messaging service Tango, and transportation app Lyft, but its $200 million investment in online delivery site ShopRunner has been the most notable, and may be a reflection of Alibaba's future development intentions.

Alibaba now holds a 39% stake in ShopRunner, which is targeting Amazon. ShopRunner can be seen as a virtual shopping mall that offers shopping options from many well-known physical retailers, such as Brooks Brothers, Neiman Marcus, and Eastern Mountain Sports. Like Amazon Prime, ShopRunner charges users a flat annual fee (currently $79) in exchange for free "2-day express delivery" service throughout the year. Quarts reported that ShopRunner's service is similar to Alibaba's Tmall website, which also charges an annual fee and takes a small commission on each transaction.

Now that ShopRunner has been compared to Amazon, Alibaba may change its attitude and make a full acquisition to give it maximum support. ShopRunner may become the US version of Alibaba's Tmall website.

Losers:

1. Yahoo

Yes, Yahoo owns a fifth of Alibaba, which is worth about $35 billion.

The reason why Yahoo is still considered a loser even with such a large stake is that it has an agreement with Alibaba - the former must sell 27% of its shares when the latter goes public - and when Yahoo sells its Alibaba shares, the company becomes less attractive to investors - Alibaba shares have become one of the biggest reasons for investors to buy Yahoo stock this year.

Without Alibaba as a growth stock, Yahoo investors' attention will soon be on CEO Marissa Mayer, who will be expected to use the returns from her Alibaba investment wisely and make acquisitions that benefit the company.

However, Yahoo's past acquisition record is not brilliant. The $1 billion acquisition of Tumblr has already proven to be a failure.

2. Tencent

Chinese Internet giant Tencent will be a direct competitor to Alibaba in many areas, ranging from online advertising to electronic payments. Until now, Tencent is still China's largest Internet company, with a market value of about $150 billion - but this situation will usher in a historic change with Alibaba's listing on Friday.

3. Uber

In the United States, Alibaba has invested $250 million in Uber's competitor Lyft. At the same time, Alibaba has also made a large investment in the taxi service app "Kuaidi" in China. This cannot but be regarded as a threat to Uber.

According to a recent report by Fortune, it took only two years for Kuaidi to grow from zero users to the current 100 million users and 1 million drivers.

4. Nasdaq

Nasdaq used to be synonymous with hot technology stocks, such as Facebook and Google. But after the highly anticipated Facebook IPO two years ago encountered setbacks, Nasdaq's glory is no longer there.

It's not surprising that Alibaba chose to list on the NYSE instead of Nasdaq, but according to Reuters, Alibaba executives did have doubts about Nasdaq's ability to handle a $21 billion IPO, given their failure to do so with Facebook two years ago.

5. Baidu

Baidu is China's largest search engine and has long been one of the favorite Chinese stocks among U.S. investors. Baidu's stock ranked as the most widely held Chinese ADS among U.S. investors last year, according to Business Insider data.

However, with the listing of Alibaba, this situation will change. Alibaba is not only a Chinese Internet company with a larger market value, but also a more diversified enterprise in terms of business than Baidu.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.