Alibaba Shares Up 1.7% as Firm Mulls $29B Unit’s IPO in the US
Image courtesy of 123rf.

Alibaba Shares Up 1.7% as Firm Mulls $29B Unit’s IPO in the US

A recent report by Morgan Stanley suggested that IDCG could be valued at $29 billion.
Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

Alibaba’s global e-commerce unit, one of six that the Chinese giant will be splitting into, is in talks with banks about a potential initial public offering (IPO) in the United States, Bloomberg reported on Thursday. The report sent Alibaba’s US-listed shares up 1.35% in the premarket.

More High-Profile Chinese Brands Seeking US Listings

Alibaba Group’s international online shopping business, International Digital Commerce Group (IDCG), is considering launching a US IPO, according to a Bloomberg report on Thursday, citing people with knowledge of the matter. The report said Alibaba’s talks with banks regarding a potential IPO are still in the early stages, adding the deal’s size is also yet to be determined. The e-commerce giant’s US-listed shares climbed 1.35% in premarket trading.

IDCG, which competes with other e-commerce bigwigs like Amazon, is one of the six business units Alibaba is dividing into as part of the company’s overhaul announced in March. The unit includes globally-known e-commerce brands, including AliExpress and Lazada.

If the unit moves forward with IPO plans, it will join numerous other prominent Chinese firms listed on US-based exchanges recently, despite the escalating tensions between the two global leaders. Earlier this year, reports revealed that the Chinese fashion retailer Shein was looking to raise $2 billion in funding ahead of its planned IPO later this year.

Alibaba recently reported stronger-than-expected financial results for the quarter ending Dec. 31 after receiving a significant boost from China’s decision to lift zero-Covid restrictions.

Join our Telegram group and never miss a breaking digital asset story.

How much is IDCG worth?

Reports about IDCG’s possible IPO come just several weeks after Alibaba announced the largest-ever business restructuring in the company’s history. The revamp is set to split Alibaba’s business into six units independently run by their respective CEOs and executive boards.

Valuations for IDCG currently vary significantly. In March, Wall Street banking giant Morgan Stanley valued the company’s “international retail” units, including Lazada and Trendyol, at about $29 billion. The same month, investment bank CICC published an analyst report valuing Alibaba’s international unit at roughly $39 billion.

In addition to its global shopping business, the remaining five units Alibaba is splitting into include cloud computing, logistics, e-commerce, media, entertainment, digital mapping, and food delivery. The overhaul was announced just a day after Alibaba founder Jack Ma was spotted in China for the first time after spending months outside his home country.

Ma disappeared from public view three years ago when he openly criticized China’s regulatory environment, slamming the country’s governance for having a “pawnshop mentality,” that negatively affects local entrepreneurs. China has recently eased its crackdown on tech firms, erasing billions of dollars of value from its most prominent brands.

Finance is changing.
Learn how, with Five Minute Finance.
A weekly newsletter that covers the big trends in FinTech and Decentralized Finance.

Do you think other Alibaba units will also pursue IPO plans in the future? Let us know in the comments below.