According to CNBC, Alibaba’s IPO could kick off in the first full week of August. That timing would give the company enough time to respond to questions that the SEC may have regarding its business, and its forecasts — a standard give and take before a company goes public.
TechCrunch confirmed the validity of the potential timing window with an individual familiar with IPOs and the venture capital space. That person indicated that the normal review cycle could be larger for Alibaba than a normal United States-based company, which could push back its filing date.
Also, given the choppy current markets, a mild IPO delay is hardly out of the question.
As TechCrunch reported around the time of the filing of Alibaba’s F-1, the company is massively profitable, with net income in its most recent fiscal year (2013) of $2.85 billion on revenue of $6.51 billion. The company is expected to raise as much as $20 billion at a valuation that should tip the scales north of $160 billion.
That implied trailing-PE ratio of around 60 is modest in the context of other recently public technology companies. Many firms in the IPO pipeline to date are unprofitable on both a GAAP and non-GAAP basis. As such, Alibaba could be less susceptible to current investor sentiment chop.
Facebook currently trades at a trailing PE of 76.68, and Twitter has a forward PE of 128.64.
Finally, the IPO timing would push any Yahoo windfall on its stake in the company into the third quarter, so adjust your forecasts accordingly.
