Alibaba Group Holding Ltd. has announced its highly anticipated Hong Kong public offering during a challenging time for the financial hub.
The multinational conglomerate is set to offer 12.5 million shares to investors at HK$188.00 a piece, which is widely heralded as the largest first-time share sale in the city. It will trade under the numerical stock code “9988” on the main board of the Stock Exchange of Hong Kong Limited.
“Alibaba is guided by our mission to make it easy to do business anywhere with the vision to be a good company that lasts for 102 years,” said chairman and CEO Daniel Zhang. “Hong Kong is one of the world’s most important financial centers, and we are grateful for the opportunity to participate in the future of Hong Kong.”
In a statement, the China-based e-com giant said the Hong Kong listing will “allow more of the company’s users and stakeholders in the Alibaba digital economy across Asia to invest and participate in Alibaba’s growth.” On top of expanding its overall investor base, the offering will tap into new capital pools in Asia, creating “a nearly round-the-clock market for global investors to trade Alibaba shares.”
The listing comes amid a recession in Hong Kong following months of protests that have led to store closures and a dip in tourism. According to government data, the gross domestic product is down 3.2% for the third quarter, registering an economic contraction of 0.5%. (The quarter-over-quarter fall marked Hong Kong’s first recession since it shouldered the Great Recession of 2009.)
It also comes during a prolonged period of tension between the United States and China, which have been embroiled in a trade war that has seen tit-for-tat tariffs on billions of dollars’ worth of goods imported from both countries. The secondary listing effectively buys Alibaba some insurance as the world’s two largest economies continue their political scuffle.
The size of the Hong Kong retail offering may be adjusted to as many as 50 million shares (or 10% of the total offering), with a goal to raise more than $13 billion. Alibaba added plans to price the remainder of its 500 million-share offering even higher. (Those 487.5 million shares will be priced by Nov. 20.)
The firm’s American depositary shares — with each representing eight ordinary shares of the company — will continue to be listed and traded on the New York Stock Exchange. Upon listing, the Hong Kong shares will be mutually interchangeable with the shares listed on the NYSE.
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