Alibaba is reportedly mulling a U.S. initial public offering (IPO) for its eCommerce unit.
The Chinese tech giant is in the early stages of weighing the listing, Bloomberg reported Thursday (May 4), citing unnamed sources. The size of the IPO, which could potentially come next year, is undetermined.
The company appeared to deny the report when asked for comment by PYMNTS, offering a one-sentence statement: “Currently, there is no IPO plan.”
The news comes weeks after Alibaba announced it would divide itself into six pieces, which would allow it to take at least some of the new businesses public.
“The original intention and fundamental purpose of this reform is to make our organization more agile, shorten decision-making links and respond faster,” CEO Daniel Zhang said in a letter to Alibaba workers in March.
Five of the six groups will have their own CEOs and boards, plus the ability to raise outside funds and go after IPOs.
The move could signal “an about-face within China’s tech kingdom,” PYMNTS wrote in March
The country has spent the bulk of the past two years cracking down on its tech giants, passing new regulations to limit their power, such as rules on monopolization and investment, and curbs on the ways companies can use algorithms to make online recommendations.
China also put IPOs on hold, including the much-anticipated IPO of Ant Group — an Alibaba affiliate — that would have been one of the biggest listings in history.
“Chopping Alibaba into pieces, in effect, with siloed operations, rids regulators of concerns about market data dominance,” according to PYMNTS. “The smaller the firm, the less power it has in its respective market in terms of pricing power. Restructuring a corporate juggernaut takes time and effort and costs money, which in turn leaves flanks vulnerable to competitors.”
Earlier this week, semiconductor designer Arm, a subsidiary of SoftBank Group, announced it was planning an IPO after filing paperwork with the Securities and Exchange Commission (SEC).
These deals are coming during a lukewarm time for public listings, with traditional IPOs raising just $2.3 billion in the first few months of the year, the worst start since 2009.
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