The hype surrounding the float of Chinese e-commerce giant Alibaba climbed one notch higher on Thursday, with one London-based spread better revealing expectations of an initial valuation reaching as much as $250 billion.
A "grey market" for its shares has sprung up after the company announced on Sunday that it had decided to begin the process of an initial public offering (IPO) in the United States, ending months of speculation. This unofficial pre-market enables traders to place bets as to what level its market capitalization will close at after the first day of official trading.
London-based spread better IG Markets told CNBC that the highest bid it had received for Alibaba's valuation had been $250 billion. It had received no sell orders. "It's IPO central around here at the moment," Brenda Kelly, a market strategist at the company told CNBC via telephone. A figure of that magnitude would mean Alibaba would emerge as the world's tenth-biggest company by market value, according to Reuters data.
Expectations have been building for months, with bankers predicting an IPO that could raise up to $15 billion for Alibaba and value the company at more than $100 billion. A Reuters survey this week sees traders having a more optimistic view, with an average from 12 brokers giving an expected value of $141 billion.
Alibaba serves millions of buyers and suppliers from more than 240 countries and regions, it says on its website, and is classed as a new technology heavyweight that could rival Amazon.
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