China’s online retailing giant Alibaba raised at least $11 billion in a share offering in Hong Kong, netting the city´s biggest offering since 2010 despite recent political turmoil.
Alibaba said Wednesday that it has set the price for the offering at $176 Hong Kong dollars, or $22.50 per share in US dollars.
The price is a 2.9 per cent discount for the closing price for its shares traded in New York. It´s also below the original maximum offer price of $188 Hong Kong dollars.
Chinese e-commerce giant Alibaba raised at least $11 billion in a share offering in Hong Kong, netting the city´s biggest offering since 2010 despite recent political turmoil
The secondary listing in Hong Kong is a rare boost for the city at a time when the former British colony is embroiled in political unrest with the Chinese government. Police are pictured detaining protesters on Monday who tried to flee from Hong Kong Polytechnic University
The company´s shares are due to begin trading on November 26. Alibaba shares were $181.97, down 1.77 percent, during early afternoon trading on the New York Stock exchange (pictured)
The company´s shares are due to begin trading on November 26. Alibaba shares were $181.97, down 1.77 percent, during early afternoon trading on the New York Stock exchange.
The secondary listing in Hong Kong is a rare boost for the city at a time when the former British colony is embroiled in political unrest with the Chinese government.
Just this week, students under siege at a Hong Kong university tried to escape through the sewers amid fears that police were going to storm the campus and open fire, causing a Tiananmen Square-style massacre.
Dozens of activists at Hong Kong Polytechnic University wrapped their knees and arms in plastic on Tuesday as they prepared to try and crawl to freedom through a perilous maze of underground tunnels.
Around 600 people had already surrendered overnight Monday, 200 of whom were children who were questioned and released, alongside 400 adults who were arrested and now face 10 years in jail accused of rioting.
Alibaba´s share code, 9988, for Hong Kong trading, is a homonym in Chinese for ‘eternal prosperity’.
The company already has a significant cash pile of more than $30 billion, but analysts said it was riding the momentum from recent strong earnings, including the $38.4 billion in ‘Singles Day’ sales on November 11, up 26 per cent from a year earlier.
Alibaba and rival JD.com reported combined sales of $70 billion during the annual marketing event that has become the world’s busiest online shopping day.
‘The advantage for Alibaba is twofold. It can diversify its shareholder base during the US-China trade war and it can command a high price, in part because investors in Hong Kong are clamoring for something positive amidst the protests’, Jasper Lawler of London Capital Group said in a commentary.
If a ‘greenshoe’ overallotment option is exercised, the proceeds from the offering could be up to $12.9 billion.
But that´s well below expectations that initially were for a share offering of up to $20 billion.
The company said it wants to use the proceeds from the share sale for strategies to expand its users, help businesses with ‘digital transformation, and continue to innovate and invest for the long term’.
Alibaba´s 2014 initial public offering was held in the US due to regulatory limitations that prevented an IPO in Hong Kong.
The company´s chairman and CEO, Daniel Zhang (pictured), issued a statement announcing the long-anticipated listing last week, saying that Alibaba ‘missed out on Hong Kong with regret’ in its 2014 listing
Alibaba’s chairman and CEO, Daniel Zhang, described the political unrest in Hong Kong as a ‘time of ongoing change’. A woman is pictured reacting to police officers during an anti-government protest in Hong Kong earlier this week
The company´s chairman and CEO, Daniel Zhang, issued a statement announcing the long-anticipated listing last week, saying that Alibaba ‘missed out on Hong Kong with regret’ in its 2014 listing.
‘During this time of ongoing change, we continue to believe that the future of Hong Kong remains bright. We hope we can contribute, in our small way, and participate in the future of Hong Kong’, Zhang said.
Alibaba´s share code, 9988, for Hong Kong trading, is a homonym in Chinese for ‘eternal prosperity’.
Earlier this month, Alibaba Group Holding reported a net profit of 72.54 billion yuan, or $10.15 billion in July-September.
The online retailer posted revenue of 119.02 billion yuan, $16.65 billion in the period.
Alibaba´s cofounder, Jack Ma, stepped down as chairman in September. He has stayed on as a member of the Alibaba Partnership, a 36-member group with the right to nominate a majority of the company’s board of directors.
E-commerce pioneer Ma, 55, is China’s richest entrepreneur with a net worth of $39 billion, according to the Hurun Report, which tracks the country’s wealthy.
Alibaba´s cofounder, Jack Ma (pictured), stepped down as chairman in September. Ma, 55, is China’s richest entrepreneur with a net worth of $39 billion, according to the Hurun Report