Alibaba raises $11.2B from investors in year’s biggest stock sale
Alibaba Group Holding Ltd. has raised about HK$88 billion ($11.2 billion) in its Hong Kong share sale, marking the biggest equity offering in the financial hub since 2010.
The company confirmed that it has priced 500 million new shares at HK$176 each in a statement on Wednesday. The price represents a 2.9% discount to the last close of Alibaba’s American depository shares in New York, with each equal to eight ordinary shares of the internet company. This Hong Kong share sale is also one of the largest globally this year.
The mega share sale comes as Hong Kong’s economy has been hurt by months of increasingly violent protests and growing anti-China sentiment. Alibaba’s return will please Chinese officials who’ve watched many of the country’s largest private firms flock overseas for capital. With a Hong Kong listing in sight, Alibaba will challenge Tencent Holdings Ltd. for the title of the largest listed corporation in the city.
Alibaba could potentially make the offering even bigger if the right conditions emerge. The company has a so-called greenshoe option to sell up to $1.9 billion worth of additional shares, which increase the total haul to $12.9 billion on the top end.
Alibaba likely wouldn’t have a hard time finding interested buyers: CNBC reported that Alibaba stopped taking orders from institutional investors a half-day earlier than originally scheduled because of strong demand.
Alibaba’s cloud gains are partially the result of heavy spending on product development. One of the latest fruits of the company’s engineering investments is the Hanguang 800, an internally designed machine learning chip unveiled in September that can speed up tasks such as image labeling. Alibaba eventually plans to make the processor available to other companies via its cloud platform.
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