Alibaba's Biggest Hurdle to Making IPO History

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Aug. 13 (Bloomberg) -- Two weeks, three continents, and 100 meetings. That -- and founder Jack Ma celebrating his 50th birthday on the road -- is what it will take for Alibaba to pull off the largest IPO in U.S. history. Bomoda CEO Brian Buchwald and Bloomberg’s leslie Picker speak on “Bloomberg West.” (Source: Bloomberg)

I know you're all over this alibaba ipo roadshow.

What is the latest?

Will this either largest ipo in history?

All of the valuation metrics are still a little fluid, but the good data coming out of tencent today tells me it will be compared to tencent.

The bigger the valuation, the bigger the offering size, usually.

But how much of a challenge is tencent to alibaba?

Where do they compete the most?

It is a tremendous challenge to alibaba, and it's interesting that they are compared to another comic of -- to one another, because the overlap today is more than it has been.

What $.10 -- tencent has been able to do with their retail model is to encroach on the mobile space on ali baba posture.

-- ali baba's turf.

Leslie, what are investors saying about that?

Are they worried about tencent?

Do they feel like ali baba stands on its own?

It's back to the old how you value one of these big internet conglomerates.

How do you monetize the users to something that matters to the investors?

If tencent is taking something away from ali baba that is valuable, that could impact the valuation going into the ipo.

If they maintain the user stronghold that they have been able to exhibit over its 15 years of existence, that is something that investors will also pay attention to and subsequently look at it in a more favorable light.

What you are working on, brian, is to try to bring luxury goods to china.

Both of these companies are suffering with counterfeit goods, which are all too common in the chinese market.

How are they handling that?

It's a great question.

And the bit of a catch as it relates to ali baba and how they work with the west.

Essentially, what they've done is, they've built their business off of a mass of consumers of western products.

And these products have driven ali baba to astronomical heights.

On the flipside, they are wicking up and saying, wait, we need to own our relationship directly with the chinese consumer and if ali baba is going to play a role, it will be a constructive role.

How do they play a positive role without diminishing the value to the consumer, which is primarily now discounted product?

Another big company is, can these companies succeed on a global scale?

Leslie, are investors more positive about one or the other?

And ali baba specifically with regard to amazon, for example.

But -- alibaba has taken a very interesting approach.

They will invest in startups in silicon valley.

That has in their way to penetrate the u.s. there has not been much evidence that they are looking to replicate their model that they have been successful with in china and bringing it over to the u.s. yet.

That said, it's not completely out of the question as an option for them.

They are looking to expand globally, but right now, their strategy is to take startups here and then benefit that way.

But something else that is happening in the chinese -- something else that is happening in the chinese market, so much investment from ali baba, buying up strategic investments in other companies, how does that play into these giant players?

I kind of liken it to the red sox and the yankees about 10 years ago, where they just have more cash and more capability and seem to have greater market value than any other company in china.

Basically, the market in china for internet companies right now is to get bought by one of these two companies, or potentially by a few other companies.

But really, it is about tencent and ali baba in an arms race in china, and then trying to set up the rest of asia, the rest of the developing world, and then make these strategic investments outside of the developing world and outside of china in north america and europe.

Which one is the red sox and which one is the yankees?

That is a good question.

I look at -- at tencent as the red sox.

And ali baba as the group with more money.

Not to belabor this analogy, but they have been playing moneyball against alibaba and they have been using their position on the mobile device and through messaging and communications to start to win market share in the commerce sector from ali baba.

I wonder how jack ma would feel about your comparison.

You wrote in your story today that he will be celebrating his 50th birthday on the road during his roadshow.

Absolutely, what a way to celebrate his birthday, right?

I hope -- i think he's looking for a gift of a pledge from investors as opposed to a tangible gift.

But yes, he will be celebrated his birthday most likely here in new york.

That is the date they will most likely have individual meetings with investors.

A big lunch in new york that monday, and then back to boston and his birthday.

A quick break and then i want

This text has been automatically generated. It may not be 100% accurate.


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