As Alibaba prepares for what could be the biggest initial public offering by a tech firm to date, the Chinese e-commerce giant has been counselling employees on how to deal with the roughly US$41 billion they could unlock through a New York listing.
While some staffers have enquired if BMW sells its luxury cars in Alibaba’s corporate orange, others may invest their stock gains in property in North America or channel funds back into start-up ventures in China, hoping to build future Alibabas, bankers and financial planners say.
The company, though, has been preparing employees for years on how to manage the avalanche of cash, warning them not to be carried away and splurge on material goods.
While Alibaba co-founders Jack Ma Yun and Joseph Tsai are already billionaires, many more paper millionaires could be minted once employees are free to sell shares after the IPO.
Current and former Alibaba employees hold 26.7 per cent of the company, having built up their holdings through stock options and other incentives awarded since 1999, according to securities filings, though these didn’t detail the number of employee shareholders.
The IPO windfall – Alibaba could be worth US$152 billion, according to the average from a Reuters survey of 25 analysts – will be larger than anything China has seen, because of the depth of the group’s employee ownership and the firm’s size.