Alibaba, the Chinese e-commerce giant, has officially set the record for the biggest initial public offering ever, after its bankers on Friday increased the size of the deal by 15% to $25 billion, two people with knowledge of the matter said on Monday.
After Alibaba?s shares leaped 38% on their first day of trading on Friday, the company?s underwriters decided, as was expected, to exercise a so-called green shoe, an option that allowed them to increase the deal size from its original $21.8 billion, the people said, declining to be identified because the information was not public.
Already, the New York IPO ranked as the biggest on a stock market in the United States, having overtaken Visa?s 2008 offering, which raised $19.7 billion. But after the green shoe kicked in, the Alibaba deal broke the global IPO record of $22.1 billion, which was set by the Agricultural Bank of China in July 2010, when it listed simultaneously on the Hong Kong and Shanghai stock exchanges.
Following the decision by Alibaba?s lead underwriters ? Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Citigroup ? the total deal size rose to 368.1 million shares, up from 320.1 million shares previously.
The additional shares were issued at the same price as the main offering: $68 apiece.