Alibaba Group Holding Ltd. could raise nearly $13 billion in its closely watched secondary listing in Hong Kong, making it the world’s largest IPO so far in 2019.
The multinational conglomerate announced that it had issued the new shares at 176 Hong Kong dollars ($22.48) — representing a discount of roughly 3% off its closing price on the New York Stock Exchange. It will begin trading under the numerical stock code 9988 on the main board of the Stock Exchange of Hong Kong Limited, starting Nov. 26.
Although the value per share fell short of the HK$188 that Albaba had set last week, the mega online retailer is still expected to raise at least $11.3 billion and up to $12.9 billion if the greenshoe or over-allotment option is granted, based on demand.
The transaction is widely considered the largest first-time share sale in the city and the world’s largest public offering so far in 2019.
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In a statement, the firm said that it plans to use the proceeds from its global offering for “the implementation of its strategies to drive user growth and engagement, empower businesses to facilitate digital transformation, and continue to innovate and invest for the long term.”
On top of expanding Alibaba’s overall investor base, the IPO will also tap into new capital pools in Asia, creating “a nearly round-the-clock market” for international investors to trade the company’s shares.
The China-based e-com giant’s landmark listing comes during a challenging time for Hong Kong, a semiautonomous Chinese territory that is struggling through political unrest and an economic recession. Months of incendiary protests at the financial hub have led to store closures and a dip in tourism, coupled with a decline of 3.2% in the gross domestic product for the third quarter.
Additionally, the trade war between the United States and China has produced 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 trade face-off.
What to Know About Alibaba’s Listing in Hong Kong