The destination of Alibaba Group's much-anticipated initial public offering will likely be determined by this catchphrase: "Show me the money".
Market analysts yesterday said the IPO for the mainland's largest e-commerce company would be conducted where it could get the highest value for its shares in what could be the biggest technology-related offering this year.
Hangzhou-based Alibaba is apparently keen to explore its best options as its senior finance executives held closed-door discussions in Hong Kong on Wednesday with a representative of Nasdaq OMX, the operator of the Nasdaq Stock Market in New York.
"It would be a matter of pride for a Chinese company like Alibaba to have its public offering on Chinese soil, but it must consider where it can get the highest price-earnings ratio," VC Brokerage director Louis Tse Ming-kwong said:
In a research note published last month, Morgan Stanley analyst Jordan Monahan calculated that Alibaba was worth between US$66 billion and US$128 billion, based on its forecast net income of US$2.28 billion this year and US$3.55 billion next year. He suggested a share offer this year would value the company at US$80 billion.
Tse said: "Alibaba must ask itself: which market can afford such a big IPO that could be many times oversubscribed?" He pointed out that Nasdaq's attraction for Alibaba was that it was the preferred market for many information-technology, media and telecommunications companies.
Li Zhongzhi, an analyst at Ping An Securities in Shenzhen, said Alibaba's shareholders - including Japan's Softbank, internet pioneer Yahoo and private-equity investors such as China Investment Corporation - "will prefer the flexibility of the Nasdaq or Hong Kong, where they can cash out their shares easily".
"But it will be difficult to make US investors recognise the full value of Alibaba," Li said. Alibaba is currently being restructured into 25 business units.
Alibaba, which entrepreneur Jack Ma Yun started out of his home in Hangzhou in 1999, is no IPO novice. Less than two years after Yahoo paid US$1 billion for a 40 per cent stake in the company in 2005, Alibaba staged in 2007 the Hong Kong listing of its subsidiary, Alibaba.com  the world's largest business-to-business e-commerce services provider.
Alibaba.com  attracted more than 560,000 Hong Kong retail investors, who placed HK$33.1 billion worth of orders, representing 257 times the 128 million shares in its offering.
On its first trading day on November 6, 2007, the stock rose more than 192 per cent to close at HK$39.50 and give the company a market capitalisation of HK$200 billion to become the most successful listing debut that year. It was privatised by parent Alibaba in June last year.