U.S. IPO makes Alibaba employees rich overnight

22 Sep

Alibaba’s IPO in the United States not only helped make many businesses commercially successful, but also benefitted thousands of the Hangzhou-based Internet giant’s employees. Around 4,000 current Alibaba employees and more than 1,000 former employees own Alibaba shares, worth a total of US$1 billion. 

Alibaba debuted in the U.S. on September 18, 2014. The largest U.S.-listed IPO helped make thousands of the company’s junior-level employees rich overnight. Since its establishment in 1999, Alibaba has rewarded many employees with company shares. Before 2007, when Alibaba’s business-to-business (B2B) website listed in Hong Kong, a high percentage of Alibaba staff owned company shares. As of September, 4,000 employees in non-management roles own company shares, out of over 20,000 current employees. More than 1,000 former staff members still have Alibaba shares, accounting for 0.6 percent of the total shares issued.

Based on the current price of US$68 per share, the number of shares which can be sold by current and former employees in the IPO should not exceed 20 percent of their personal holdings. The value of the number of shares permitted for sale, in this case, comes to around US$1.06 billion, higher than the value of shares permitted for sale by company founder Ma Yun.

Employees who joined the company by 2007 own shares worth millions of U.S. dollars. Investment institutions attempted before the IPO to purchase Alibaba shares from its employees, but most employees are not planning to trade their holdings and are optimistic about the company’s long-term development.

 

 

 

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