Amid Investor Frenzy, Alibaba Set to Price Shares

Chinese e-commerce giant Alibaba Group Holding Ltd is set to sell some $22 billion of shares on Thursday, capping a two-week road show that drew frenzied interest from investors worldwide and may be the world's largest ever initial public offering.

The shares are expected to be priced after the markets close at 4 p.m. Thursday and start trading on the New York Stock Exchange on Friday under the ticker "BABA." <BABA.N>

Investors, keen to buy into China's rapid growth and evolving Internet sector, have been clamoring to get shares since top executives at Alibaba, including co-founder and executive chairman Jack Ma, kicked off the road show last week.

Alibaba, which handles more transactions than Inc <AMZN.O> and eBay Inc <EBAY.O> combined, boosted the IPO price range to between $66 and $68 a share due to the strong demand.

At the top end of that range, the IPO would raise almost $22 billion, but if underwriters exercise an option to sell more shares, Alibaba's market debut will top Agricultural Bank of China Ltd's <601288.SS> record $22.1 billion listing in 2010.

"We believe that the current pricing range of $66-$68 significantly undervalues the long-term growth potential of the company," CRT Capital analyst Neil Doshi said in a research note that initiated coverage of the stock with a "buy" rating.

In the 15 years since Ma founded the company in his one-bedroom apartment, Alibaba has come to power four-fifths of all online commerce conducted in China, the world's second-largest economy. It has also branched out into areas such as e-payments and financial investment.

Alibaba's complex governance structure and Ma's outside investments have raised questions about potential conflicts of interest and investors' ability to sway Alibaba's strategy.

The company decided to list its shares in New York after Hong Kong stock exchange officials rejected its request to allow a small group of company insiders to nominate the majority of the board. Hong Kong Exchanges and Clearing Ltd, <0388.HK> which operates the exchange, has a policy against companies having multiple classes of shares with different voting rights, but is now considering loosening those rules.

The IPO caps a lengthy listing process that saw Alibaba take the rare step of not appointing a single bank to take charge of the IPO process. Instead, it tapped all its major bookrunners for advice, and divided tasks among them.

Alibaba plans to expand its business in the United States and Europe after the deal. But in the United States at least, it is not widely known: an Ipsos poll found that 88 percent of Americans had not heard of the company.