By Juro Osawa and Anna Prior
Chinese Internet giant Alibaba Group Holding Ltd. released sales
figures for its two main shopping sites, as well as a list of the
27 individuals who control most nominations to the company's board,
in a bid to appease investors hungry for more information ahead of
what is expected to be a blockbuster public offering in the
U.S.
In an amended filing for its initial public offering, released
Monday, Alibaba for the first time disclosed how much business the
two sites had transacted over the past eight quarters.
Taobao, a gigantic marketplace where millions of small Chinese
merchants sell virtually everything imaginable, handled about $177
billion worth of transactions last year, while transactions on
Tmall, an online mall that hosts brands and retailers, stood at
about $70 billion. By comparison, Amazon.com Inc. had roughly $100
billion in transactions last year, according to market research
firm Forrester Research.
Tmall, however, has been growing much faster than Taobao over
the past year: In the first quarter of this year, Tmall's
transaction volume rose 90% from a year earlier to about $22
billion, while Taobao's transactions rose 32% to about $47
billion.
Alibaba also reported its latest quarterly results for the three
months ended March 31. Its operating margin for the quarter
declined to 45.3% from 51.3% a year earlier. The company said its
margins fell in part because it spent more on marketing to attract
smartphone users to its shopping sites. In the quarter, 27.4% of
the transactions on Alibaba's Chinese shopping sites came through
mobile phones, up sharply from 10.7% a year earlier.
The filing also revealed for the first time the names of all 27
members of Alibaba's partnership, which has the power to nominate
more than half of the directors on the company's board. The
partners include 22 members of management such as Chief Executive
Jonathan Lu, Executive Chairman Jack Ma, executive vice chairman
Joseph Tsai, and chief operating officer Daniel Zhang.
It also includes four executives of Alibaba's financial
affiliate, the Small and Micro Financial Services Co., and one
executive from China Smart Logistics, a logistic company that was
created last year by Alibaba and other Chinese retail and delivery
companies.
The board, which will consist of nine members--up from the four
named in the previous filing--will include Mssrs. Tsai, Ma, Lu and
Zhang, as well as independent directors Tung Chee-hwa, Walter Teh
Ming Kwauk, J. Michael Evans and Yahoo co-founder Jerry Yang.
Jacqueline Reses, a board member since December 2012 and Yahoo
chief development officer, will resign, according to the
filing.
The company didn't disclose what its principal shareholders are
selling in the offering.
The revised filing came after some investors complained about
the perceived lack of disclosure in Alibaba's first filing in early
May. Alibaba's listing, which is expected to happen in the next few
months, could raise $20 billion or more, making it one of the
largest IPOs in U.S. history, according to bankers and
analysts.
While companies are typically eager to keep investors happy, the
stakes in this case are higher because the sheer number of shares
up for sale means bankers need to ensure there is deep enough
demand from the largest investors.
Companies often revise IPO documents after the initial filing.
Alibaba is in the process of fielding questions from the Securities
and Exchange Commission, which must approve the document before
shares can be priced and sold.
Before that approval comes, and before the company sets an
expected price range on the stock, the company cannot speak to
investors. Its bankers, however, can talk to investors generally
about the company, though they cannot solicit from investors
whether they would invest, or at what price they would buy in,
according to U.S. rules.
The listing, in New York, is currently being planned for the
first half of August, though the timing isn't set in stone. The
company expects to shop the deal to investors globally, with large
meetings in hubs possibly including Hong Kong, New York and
London.
Telis Demos contributed to this article
Write to Juro Osawa at juro.osawa@wsj.com and Anna Prior at
anna.prior@wsj.com
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