Alibaba junks Hong Kong IPO

Talks with HKEx breaks down.

Chinese e-commerce giant Alibaba Group Holding, Ltd will not launch its highly anticipated initial public offering in Hong Kong after insurmountable disagreements with the Hong Kong Exchanges and Clearing Ltd. It will hold its IPO in New York instead.

The talks between Alibaba and Hong Kong went nowhere after both sides disagreed on Alibaba’s demand to list in Hong Kong while at the same time allowing its "partners," namely its founders and senior employees, to keep control over the membership of its board.

Analysts said the choice of New York should make it easy for Alibaba founder Jack Ma and his management team to keep tight control on the company by using the dual share structure employed by Internet companies such as Google and Facebook

The loss of the IPO is a huge blow to Hong Kong, which saw it as an opportunity to regain its status as the world’s IPO hub. Alibaba's stock market debut could value the Chinese e-commerce company at US$70 billion or more, according to analysts.

This amount would make Alibaba the worldwide technology industry's largest IPO since Facebook's offering in 2012.

Alibaba’s decision ends weeks of negotiations between the company, HKEx and the city's regulators over Alibaba's shareholding structure. Officials at Alibaba and HKEx declined to comment.