Alibaba Boosts IPO Size to $25 Billion

Alibaba Group Holding Ltd. (BABA)’s initial public offering became the biggest ever at $25 billion, after bankers exercised an option to boost the deal size by 15 percent on strong demand.

As told by a private person who chose to remain anonymous, the underwriters exercised a so-called greenshoe option to sell an additional 48 million American depositary shares. Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Citigroup Inc. managed the offering.

Shares of Alibaba soared 38 percent on their Friday trading debut, the biggest first-day jump for an IPO of at least $10 billion. The company marketed the offering at a discount to its Chinese peers, attracting interest from money managers including Fidelity Investments, BlackRock Inc. and T. Rowe Price Group Inc. who each asked for at least $1 billion of shares, people familiar with the matter said last week.

Alibaba, led by billionaire chairman Jack Ma, has profited from China’s burgeoning consumer class by dominating the e-commerce industry in the country of 1.36 billion people. It surpassed Facebook Inc. (FB) by market capitalization from the minute it started trading and closed with a valuation of $231.4 billion, making it larger than Amazon.com Inc. and EBay Inc. combined.

Cina Coren
Cina Coren is a former Wall Street broker and financial advisor. She holds a Master's degree in Communications and spent many years writing for international news outlets and journalistic publications. Today, Cina spends most of her time writing internet articles and blogs, and reading various newspapers to stay on top of the news.