Alibaba shares fall over 9% in HK
Alibaba's stock price was reduced by over 9% on the Hong Kong Stock Exchange following the announcement of approximately 710 million new shares being issued to raise more than $10 billion. This marks the largest secondary share offering by a listed company in the history of the stock exchange. Despite strong demand exceeding $28 billion, the set price with a discount of nearly 8.5% led investors to reevaluate the stock, especially as the company intends to finance investments in chip technology, data centers, and artificial intelligence, including the Qwen project. Alibaba expects to recover its substantial investment costs within 2.5 to 3 years. However, concerns about the impact on existing shareholders' stakes caused the shares to fall, with the Hong Kong Technology Index dropping by about 2%, and Tencent's stock declining by less than 4%.
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