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Alibaba Working on Potential $15 Billion Deal with Investors

There is an anticipated offer in the U.S. that could raise $15 billion for the Chinese company.

After it was revealed that Alibaba Group earned $3.06 billion in fourth quarter revenue, it didn’t take long for founder Jack Ma to start sparking up deals in the U.S.

There is now an anticipated initial public offering in the U.S. that could raise $15 billion from investors, The Wall Street Journal is reporting.

Alibaba works by adapting existing technology to serve China's fast-growing e-commerce market. When the internet was emerging in China, Taobao was created by the company to sell directly to consumers.

"Alibaba has played the scale game really, really well," Paul McKenzie, an analyst at Hong Kong brokerage firm CLSA in Hong Kong told WSJ. "They created a virtuous circle of more merchants attracting more shoppers, which in turn brings in more merchants."

For Michael Reynal, a portfolio manager at RS Investments, he isn’t falling for the hype and is still unsure about investing in Alibaba.

“We need to look at valuation very carefully because there has been so much speculation,” he said. “We already know the growth story, and we want to see how sustainable that is."

 

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