Chinese web giants head west for capital

Alibaba is planning to file its IPO in the US while Weibo unveils a plan to sell shares in the States

Two of China’s Internet industry stalwarts are looking to the US to raise capital as interest in Chinese tech stocks increases.

Alibaba, China’s undisputed e-commerce giant, is planning to file its initial public offering (IPO) in the US as soon as April, which is likely to rival Facebook’s record-breaking sale in 2013.

Alibaba generated $6.7bn in revenue and $2.8bn in net profit in the financial year through September 2013, according to Yahoo filings, and is currently valued at around $153bn – a multiple of 23 times annual sales. By comparison, Amazon’s market value of $171bn is 2.3 times 2013 sales, while eBay’s market value of $75bn is 4.6 times annual sales.

The e-commerce giant is listing in the US because Hong Kong regulators will not approve a proposed governance structure that would allow share classes with different voting rights. Jack Ma, Alibaba's founder, owns slightly more than 10% of the total shares in Alibaba, but is hoping the governance structure would allow him greater influence over the company.

Similar structures are used by Internet pioneers Mark Zuckerberg, Larry Page and Sergey Brin, the founders of Facebook and Google, to help them retain control of their organisations after they became publically listed.

Meanwhile, China’s Twitter-style microblogging service Weibo has announced plans to raise up to $500m in capital through filing on the US stock market. According to papers filed with US regulators, Weibo had 129 million monthly active users in December last year and generated $188m of revenue in 2013.

The popular social media platform has not yet revealed the number of shares it plans to sell or given an indication of the price range.