Alibaba listing’s legal fees set to dwarf Facebook
ALIBABA, the Chinese e-commerce giant that sells more than Amazon and Ebay combined and is seeking to raise over $21bn (£12.8bn) in its float this month, will pay some of the highest legal fees for a US listing, six times what Facebook paid two years ago.
The legal fees for Alibaba’s public listing, $15.8m according to its latest filing on Friday, rank as the fourth highest in the past 10 years, mainly due to the firm’s complex structure and the number of times it has revised its prospectus – six times since May.
Alibaba’s fees will be shared between Simpson Thacher, the New York-based law firm, its Chinese counsel, Fangda Partners, and Cayman Islands adviser Maples and Calder.
Facebook paid just $2.6m in legal fees for its float in 2012.
Meanwhile Alibaba’s float could be a flop in terms of the number of retail investors who take part. According to broker TD Ameritrade Holding, the number of client inquiries about Alibaba is around a quarter of what it was for Facebook at this stage of the process and about half of what it was for Twitter.
“The market may worry that the financial reporting framework doesn’t match the rigour they have come to expect in the US and Europe,” said BDO’s Tomas Freyman. “And China’s bureaucracy and the myriad complexities of its regulatory and legal system may stymie the entrepreneurial spirit which has characterised Silicon Valley’s success stories.”