Alibaba Announces Additional 75 Million Share Sale in Hong Kong

Underwriters on Alibaba's $11.3 billion Hong Kong offering have exercised the over-allotment option in full. The additional shares are expected to lift off on Friday.

CapitalWatch Staff
    Dec 03, 2019 10:00 AM  PT
Alibaba Announces Additional 75 Million Share Sale in Hong Kong
resource from: (Image: Alizila)   
(Image: Alizila)

Alibaba Group Holding Ltd. (NYSE: BABA), recently listed on The Stock Exchange of Hong Kong under code "9988," will raise an additional $1.7 billion in Hong Kong.

The e-commerce giant will sell 75 million shares at HK$176 each after the international underwriters on Alibaba's debut in Hong Kong last week have fully exercised the over-allotment option, according to a filing on Tuesday. That represents 15% of the $11.3 billion Hong Kong flotation Alibaba celebrated on Nov. 26.

In response to the news, New York-listed stock of the company slipped nearly 2% by midday, to $192.94 per American depositary share.

In its Hong Kong debut, the biggest and most anticipated offering this year across bourses globally, shares in Alibaba surged nearly 7% on Day One. Alizila, Alibaba's official news outlet, called the offering a "coming home" after the tech conglomerate completed the world's largest initial public offering in 2014 in New York, raising $25 billion. The Hong Kong exchange was its first choice, Alizila wrote, but the city's capital market regulations at the time hindered the listing.

"I want to especially thank Hong Kong and the Hong Kong Stock Exchange. As a result of the continuous innovation and changes to the Hong Kong capital market, we are able to realize what we regrettably missed out on five years ago," Alibaba's chairman and chief executive, Daniel Zhang, said, as quoted by Alizila.

The former chairman and founder of the Hangzhou-based tech company, legendary leader Jack Ma, has said that he considers the company's stock in the U.S. undervalued. Ma, China's richest man worth $38 billion, according to Business Insider, had stepped down from Alibaba in September in a planned retiring from his position.

In an interview with Forbes Asia in October, Ma said his new focus is philanthropy – specifically, he plans to launch academic programs on philanthropy in China.

The over-allotment shares are approved to float on the Stock Exchange of Hong Kong on Friday, Dec. 6.