Alibaba’s Woes Could Speed Twitter IPO

Events playing out in Hong Kong suggest that any initial public offering of Twitter shares in the U.S. will come sooner, rather than later.

As noted in this column in July, the biggest Internet IPO on the horizon will come not from the San Francisco-based social media start-up but from Alibaba Group Holding, a fast-growing e-commerce company with headquarters on mainland China.

Earlier this year, Alibaba signaled it would offer its shares on the Hong Kong Stock Exchange, which last month celebrated 20 years of accepting such listings from mainland companies.

But Alibaba's plans for a listing in the former British colony have hit a major snag, as exchange officials there rejected its proposed ownership structure, saying it violates rules that protect the rights of ordinary shareholders.

The company's failure to get the rules exemption it asked for in Hong Kong makes it more likely Alibaba will list its IPO shares in New York instead.

Such a move would very likely push a U.S. listing by Alibaba into the first or second quarter of next year, as it would take time for the company to clear regulatory hurdles and adjust its accounting to conform to U.S. rules.

It would also put the offering in competition with Twitter's -- if the U.S.-based firm hasn't executed its IPO by then.

Alibaba is at least several times the size of Twitter, as measured by revenue.

According to figures made public in July by Yahoo, which owns approximately 24% of Alibaba, revenue for the China-based firm soared 71% to $1.38 billion for the quarter ended in March.

That size and rate of growth suggest the company will post 2013 revenue of more than $5 billion, though we won't know for sure until Alibaba discloses its financial statements.

Twitter also hasn't yet disclosed details of its business, choosing instead to file its initial registration statement...

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