Alibaba Begins to Prepare Employees For $40 Billion Windfall.
The potential record-breaking IPO of Chinese giant e-commerce Alibaba that’s been set for the US stock market has caused its management to issue some very unusual advice.
The company has been warning its staff, who stand to reap a massive amount of financial returns from the listing, about the perils of their new-found wealth.
Alibaba had finally filed in their IPO paperwork during the previous month for a flotation which is expected to break records. It F1 filing reveals that Alibaba is expecting to raise a total of $1 billion. But much earlier prediction had suggested that th eonline retailer has the potentional of raising as much as $15 billion in its flotation.
It’s not much clear during this time on how much stock shall be sold, but a recent poll done by Reuters of 25 analysts stated that Alibaba cloud become worth $152 billion following the IPO, thereby instantly giving shareholders a valuable stock options.
Both current and former Alibaba employees hold over 26.7 percent of the company share, but Alibaba has been busy preparing their staff for the financial rewards and has warned them to not get too carried away and spend it all on massive amounts of material goods, according to sources provided by Reuters. It states that the staff could potentially be line for $40 billion windfall.
It seems that some staff members have already begun to approached BMW dealerships in eastern Chinese city of Hangzhou, to inquire as to whether the cars are available in orange, which is the corporate colors of Alibaba.
The staff has been receiving counselling on the matter, but 20,000 employees have already had the opportunity to sell part of their stakes during previous Alibaba structured share sales.
“The thinking was that if sudden wealth is like venom, giving small doses every now and then was a bit like anti-venom because your company isn’t thrown into chaos,” Reuters quoted a person familiar with Alibaba’s incentive plans as saying. The source wished to remain anonymous because they are not authorised to speak publicly on the matter.
Alibaba has already acknowledge within its F1 filing over its concerns about employees shareholders and their new-found wealth, and maybe wanting to move on.
“It may be difficult for us to continue to retain and motivate these employees, and this wealth could affect their decisions about whether or not they remain with us,” it said.
The IPO of Alibaba shall also provide a booster shot for some very important name firms. The company’s largest single shareholder, with over 324.4 percent stake, is Japanese telecoms firms SoftBank Corp.