The whole capital market is restless

Ma's hesitation, let the whole capital market restlessness.

"The rumor that the A1 table has been submitted is wrong. "The News of Alibaba's listing arrangement has confirmed to reporters that neither the underwriting group nor the listing site have been finalized, or even that there is no definite version of which assets are packaged as a whole."

For Alibaba, exchanges and investment banking are in a free-for-all. "Alibaba" has become a "sensitive word" in central Hong Kong, a piece of paper to keep the profit-making investment bankers shut up.

In fact, whether in the United States or Hong Kong, the capital market for Alibaba up to hundreds of billions of dollars in the valuation of the basic has reached a consensus, the six-year preheating also let investors look forward to, what makes this "annual IPO" so tangled?

Changes in the structure of the board

For a long time, as a unlisted company, Mr Ma's control of Alibaba Group has relied on 2:2 of the board structure, that is, two Alibaba Group executives (one is Ma Yun), a soft silver representative, a Yahoo representative.

"The Board of Directors is generally established according to the Articles of association and the Articles of Incorporation are approved by shareholders." "People familiar with the law said to reporters, so although the two major shareholders total shareholding higher, but in the 1-person 1-vote board, the two major shareholders do not have absolute control."

According to Yahoo's filing with the SEC, the Alibaba Group reached a "new shareholder agreement" with the company after it bought its shares last year, and the Board will continue to maintain the structure of these 4 people until the Alibaba Group is listed as a whole. For Yahoo, the right to appoint board members is not less than 398,871,490 shares, and last year after the repurchase, Yahoo shares about 524 million shares, that is still the right to appoint directors.

And once listed, whether the board continues to maintain 4 people, and maintain the 2:2 structure, there may be significant changes.

After 2005 years Yahoo and Alibaba Group signed a strategic cooperation agreement, which pointed out that, as of July 31, 2005, Alibaba Group has issued about 89.61 million shares of common stock, a preferred stock of about 56.45 million shares, type B preferred shares of about 79.77 million shares, C-Class preferred shares about 8.43 million shares. Preferred shares may be converted to common shares with voting rights when certain conditions are met, although the terms of conversion are not specified in this agreement. Referring to the prospectus of Alibaba Network Limited ("Alibaba Network") in 2007 when Hong Kong was listed, the company specified that the shares issued as an incentive mechanism to employees or other eligible persons were not accompanied by any voting rights. That is, some employees do not have the right to vote unless the conditions are met to convert to the common stock part.

With regard to Mr Ma's own holdings in Alibaba Group, the latest public information goes back to the end of 2011, when the Alibaba network, which has not yet returned, disclosed in the last annual report that Mr. Ma's shareholding in the group was 7.43%. It also includes 600,000 shares of share rights and 2.1 million employee incentive schemes, which do not specify whether this part has the right to vote, and if the general situation, the horse cloud has the voting rights of about 7.32%.

August 2005, Yahoo bought Alibaba Group 40% shares, 35% have the right to vote. Last year, Alibaba Group bought back 523 million shares of Yahoo's 1.047 billion common shares, the proportion fell to 24%. SoftBank recently disclosed the 2013 financial year report, as of March 31 this year, its holding Alibaba voting rights of 36.7%. In other words, the two major shareholders have the right to vote in the total of about 50%.

"After the listing, if you want to revise the articles of Incorporation, decide by the shareholders ' meeting, whether the board is still 4 people, whether the Alibaba Group or 2 seats, may change." The legal person explained.

The Battle of control power

For Mr Ma, listing may be another battle for control.

Alibaba Group's IPO has been preheated for more than half a year, for which, Hong Kong or the United States who can give higher valuations, and not just as the issuer of the greedy embodiment.

According to the Yahoo and Alibaba Group's share repurchase agreement last year, Alibaba Group's IPO can continue to buy back its remaining shares only if certain conditions are met. These conditions include the IPO having to raise at least 3 billion dollars in cash (before deducting all fees); The IPO price must exceed 1.1 times times the last year's repurchase price; one of the global coordinators is designated by Yahoo; The IPO site must be in Hong Kong or the United States, or under certain conditions in mainland China.

Some investment bankers for reporters, Alibaba Group on the swing of the listing, in addition to valuation and investor recognition, after the listing, whether to continue to maintain control may be more important aspects. "In Hong Kong, a share has a right to vote, whereas in the United States a different voting share structure can be used." The investment bankers said further.

The so-called "different voting shares structure", that is, a stock, B shares, etc. that can often be seen in the information of U.S. listed companies, that is, the two stocks have different voting rights, and the original shareholder has a bigger right to vote.

Baidu had taken this approach when it was listed in the United States, with a new issue of a shares voting rights per share, the original shares of Class B, 10 voting rights per share, before the News Corp split, Murdoch left Deng with her two daughters Grace and Chloe shares, is completely without the right to vote a-class shares.

If you choose Hong Kong, what does one person and one vote mean?

According to the Alibaba Network 2011 Annual report, 8 directors, including Mr Ma, hold shares in Alibaba Group totaling about 10.38%. The aforementioned legal person explained that it is the option to buy only preferred shares prior to listing, and that after listing in Hong Kong, the shares will also have the right to vote, because Hong Kong has only one stake.

If the IPO does not meet the above conditions, Yahoo will continue to hold 24% shares, plus soft silver 36.7% shareholding, the total voting power will be more than 50%. To revise the articles of association, both have dominated the general meeting of shareholders. This is obviously not a dual-currency dual-share can not be resolved.

Clearly, the regulatory environment in Hong Kong may be more familiar to Alibaba, and valuations and investor approval may not be much worse than in the US, but there is a big risk of maintaining control. In the United States, although more complex regulation, it can be through the existing major shareholders to issue a partial non-voting shares, to resolve the risk of control.