HONG KONG – Alibaba’s initial public offering (IPO) has now secured its place as the world’s largest, raising a total of $25 billion after the e-commerce giant and some of its shareholders opted to sell additional shares. This move resulted in underwriters of the sale earning over $300 million in fees.
The fees, totaling 1.2 percent of the entire deal, include $121.8 million paid by Alibaba in commissions and an additional $178.6 million to be paid by selling shareholders, according to a filing with the U.S. Securities and Exchange Commission on Monday.
Strong investor demand initially drove the IPO to raise $21.8 billion, followed by a remarkable 38 percent surge in Alibaba Group Holding Ltd’s stock on its debut day last Friday. In response to this overwhelming response, underwriters exercised an option to sell an additional 48 million shares, confirmed by a source familiar with the deal.
This additional offering surpasses the previous global record set by Agricultural Bank of China Ltd in 2010, which raised $22.1 billion.
According to the prospectus, Alibaba agreed to sell an additional 26.1 million shares under this option, with Yahoo Inc. and company executives also participating. Yahoo Inc. sold an additional 18.3 million shares, resulting in $1.2 billion in proceeds, while Alibaba’s co-founder Jack Ma and Joe Tsai sold 2.7 million and 902,782 additional shares respectively.
The source, who requested anonymity due to pending official confirmation of the sale details, declined to provide further specifics.
Alibaba declined to comment on the matter.
Citigroup Inc, Credit Suisse Group AG, Deutsche Bank, Goldman Sachs Group Inc, JPMorgan Chase & Co, and Morgan Stanley served as joint bookrunners for the IPO, with Rothschild acting as Alibaba’s independent financial advisor.
This milestone underscores Alibaba’s formidable position in global finance and investor confidence in its growth prospects amid robust market demand.
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