Alibaba Share Sale To Raise Record $25bn

China's biggest online retailer is on course to smash the record for the biggest share sale of all time this week, after increasing the target price for its stock.

Alibaba is set to raise $25bn (£15.4bn) from investors in its flotation on the New York Stock Exchange - with strong interest driving the decision to increase the price target from the planned $60-$66-per-share to $66-$68.

It was reported last week that the flotation was already over-subscribed - with demand from Asia understood to be particularly high - leaving underwriters under pressure to exercise an option to sell additional shares.

The initial public offering (IPO) was previously expected to raise up to $21bn - just shy of the all-time record of $22.1bn set by the Agricultural Bank of China in 2010.

But the e-commerce bazaar's recent financial performance and swift expansion - including plans for operations in the US - has made it a hot property.

The company currently handles more transactions than Amazon.com (NasdaqGS: AMZN - news) and eBay combined and its chief executive Jack Ma has already announced plans to expand its interests in Europe and the US.

It confirmed three weeks ago that second-quarter profits had tripled to £1.2bn on the back of soaring revenues, with spending via mobile devices rising almost four-fold.

Kelland Willis, analyst at Forrester Research (NasdaqGS: FORR - news) , told the AFP news agency: "When investors see growth, they get excited."

He pointed to the 150% gains of JD.com, Alibaba's main Chinese rival, which went public in May.

Other experts were more cautious - some citing concerns on governance.

Portfolio manager at Meeschaert Financial Services, Gregori Volokhine said of Alibaba: "They have moved prudently, because it's very difficult to know in advance the appetite of US institutional investors.

"People will be cautious because a lot of investors were burned by Facebook (NasdaqGS: FB - news) ," he noted, recalling the 2012 offering which saw a sharp drop from the opening price because of a glitch.

The IPO, while helping fund Alibaba's planned expansion, is also due to deliver a handsome return for Yahoo (NasdaqGS: YHOO - news) !

The internet firm, which bought 40% cent of Alibaba in 2005 for $1bn (£600m), sold almost half of its stake in 2012 but still netted $7.6bn from that.

Its plans to reduce its shareholding further in the flotation is forecast to net it at least another $10bn - money it can use to fund its own diversification.