Staff counseled on US$41b windfall as IPO nears
Print Edition
AS Alibaba prepares for what could be the biggest technology company initial public offering to date, the Chinese e-commerce giant has been counseling employees on how to deal with the roughly US$41 billion they could unlock through a New York listing.
While some staffers have enquired if premium brand BMW sells cars in Alibaba’s corporate orange, others may invest windfall stock gains in property in North America or channel funds back into startup ventures in China, hoping to build future Alibabas, according to bankers and financial planners.
The company, though, has been preparing employees for years on how to manage the avalanche of cash, warning them not to be carried away and splurge on material goods.
While Alibaba Group’s co-founders Jack Ma and Joseph Tsai are already billionaires, many more paper millionaires could be minted once employees are free to sell shares some time after the IPO.
Current and former Alibaba employees hold 26.7 percent of the company, having built up their holdings through stock options and other incentives awarded since 1999, according to securities filings, though these didn’t detail the number of employees who are shareholders.
The IPO windfall — Alibaba could be worth US$152 billion, according to the average from a Reuters survey of 25 analysts — will be larger than anything China has seen because of the depth of the group’s employee ownership and the size of the company.
Not just managers, but software engineers and staff from sales and marketing and related companies such as Alipay also stand to benefit from selling shares after the IPO. Some of the 20,000 employees have already had the opportunity to sell part of their stakes during previous Alibaba structured share sales through so-called liquidity programs.
In its IPO prospectus, Alibaba acknowledged its concerns about employee shareholders coming into new-found wealth, and maybe wanting to move on.
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