"There aren't many cases in China where a private company scales from an apartment to more than 20,000 people like that," said another person with direct knowledge of the IPO process. "More than anything, the impact might be in start-ups, with people coming out with money who have been through this and learned."
Much of the Alibaba wealth is in the hands of Ma, Tsai and a group of senior executives who make up the so-called Alibaba Partnership.
These 28 people—22 from Alibaba and 6 from related companies and affiliates—own a combined 14 percent of Alibaba, according to the company's filing with the U.S. Securities and Exchange Commission—worth over $21 billion.
The filing doesn't detail the holdings of top executives such as CEO Jonathan Lu, Chief Financial Officer Maggie Wu, Chief Operating Officer Daniel Zhang, Chief Technology Officer Jian Wan and General Counsel Timothy Steinert. Those five, who with Ma and Tsai are among the 28 partners, appear only as owning less than 1 percent of Alibaba.
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The IPO will provide employees their biggest opportunity yet to cash out of their vested stocks once share lock-ups expire.
The largest previous sell-down was in 2011 when employees sold about $2 billion worth of stakes to investors including private equity firms DST Global and Silver Lake, according to a statement from those firms and the IPO filing.
Ma sold $162 million worth of shares that year, while Tsai raised $108 million from selling part of his stake.
In the same year, CEO Lu raised $37.7 million, CFO Wu sold $4.99 million worth of shares, and former COO Kwan sold a stake worth $40.5 million. Sabrina Peng, an early Alibaba employee and former vice president of its business department, raised $4.6 million in the 2011 sell-down.
Alibaba's biggest single shareholder, with a 34.4 percent stake, is Japanese telecoms firm SoftBank, followed by U.S. internet group Yahoo, with 22.6 percent. Other large shareholders include Silver Lake, DST Global and Singapore state investor Temasek.
Employees will not be able to cash out of their holdings entirely through the IPO, as most employee stock is likely to be locked up for months, maybe years, people familiar with the listing process said.
When Alibaba listed its Alibaba.com business-to-business unit in 2007, it was six months before stockholders could sell 40 percent of the shares held in an employee equity exchange program. For the remaining 60 percent, the lock-up was for one year.