Alibaba IPO's order taking is set to to close at September 16 and 17 for U.S. based investors and Asia based investors respectively. This Chinese e-commerce giant, who is targeting to be priced at the higher offering range of $60 to $66 per share, would be the largest initil public offering in U.S. history.
Underwriters of this public offering are said to earn around $30 million in fees. Banks who have a significat role in this offering are Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc., JP Morgan Chase & Co., Morgan Stanley and Citigroup Inc.
Bank of America on the other hand, has found another way to make a profit even tough they are not the part of the e-commerce group's underwriting banks. The bank is said to have been selling a product with an underlying bet on Alibaba's valuation. It is rumored to already have a half billion dollar outstanding value in the market. With the structured trade. Bank of America was said to be charging its clients a one percent fee.
Bank of America spokesperson has not given a statement on the said topic.
Bank of America is a North Carolina-based multinational bank. It is the second largest bank hoding company in the United Stated based on its assets. The bank acquired Merril Lynch last 2008 making Bank of America the world's largest weath management corporation. Last 2012, it was considered as one of the four big banks in the United States alongside Citigroup, JP Morgan Chase and Wells Fargo.
Last December, Bank of America has settled with the long running lawsuit of the Federal Housing Finance Agency which is the conservator for two mortgage companies, Fannie Mae and Freddie Mac, on subprime issues. The bank was involved in one of the biggest financial crisis in the United States that began last 2007 long with other banks.
