When Alibaba Group Holding Ltd. outlined its plans for an IPO in a filing yesterday, it left unsaid whether the shares will list on the NYSE or Nasdaq.
For both exchanges, there’s more at stake than the right to brag about hosting what could be the largest U.S. IPO. A victory for IntercontinentalExchange Group Inc.’s (ICE) NYSE would underscore how it’s undermined Nasdaq OMX Group Inc.’s (NDAQ) former dominance over technology company listings. Nasdaq can show it’s moved past the technical errors that plagued Facebook Inc.’s debut on that market in 2012 and contributed to Twitter Inc.’s choosing NYSE for its listing last year.
Money is at stake, too, as NYSE and Nasdaq collect fees from their listed companies. A high-profile win such as Hangzhou, China-based Alibaba can help lure other companies to a venue. NYSE has ground to make up among Chinese technology and Internet firms: Nasdaq lists 47 companies with those credentials while 22 are on NYSE, according to data from each exchange.
While Nasdaq, which is the listing venue for Google Inc., Apple Inc., and Alibaba shareholder Yahoo! Inc. (YHOO), was once the obvious choice for an Internet upstart, NYSE has been chipping away at its lead. Out of the 10 technology and Internet IPOs that priced during the first quarter in the U.S., seven chose to list on the NYSE, according to data compiled by Bloomberg.
The perception of Nasdaq as a natural home for technology listings was undermined by the Facebook IPO, in which a computer error caused the exchange operator to mishandle investors’ orders. Nasdaq paid $10 million to settle regulatory charges that the error violated securities laws. In the aftermath, Twitter picked NYSE over Nasdaq when it debuted.
From 2001 through 2011, Nasdaq won 122 technology and Internet IPOs and NYSE scored 42, data compiled by Bloomberg show. LinkedIn Corp., Pandora Media Inc. and Yelp Inc. have all selected the NYSE for IPOs since. From the start of 2012 through March 31 of this year, NYSE won 45 technology listings that raised $8.8 billion, while Nasdaq secured 35 that raised $20.7 billion, an amount padded by Facebook’s $16 billion debut.
Alibaba might raise as much as $20 billion, topping a $19.65 billion offering by Visa Inc. in 2008, data compiled by Bloomberg show. In yesterday’s filing with the Securities and Exchange Commission, the company provided a placeholder amount of $1 billion. That figure is used to calculate registration fees and will change. Alibaba didn’t specify the number or price of shares it will offer.
The company’s market value is estimated at $168 billion, bigger than 95 percent of the Standard & Poor’s 500 Index -- and the most valuable Internet company after Google Inc., according to data compiled by Bloomberg. The company is looking to sell about a 12 percent stake, people familiar with the matter have said, which would make the offering around $20 billion based on the estimated value.
Will Briganti, a Nasdaq spokesman, said the exchange doesn’t comment on companies at this stage of the listing process. Sara Rich, a spokeswoman for NYSE, also declined to comment.
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