Alibaba offers glimpse of plans for long-awaited Hong Kong IPO

2 min read
Alibaba’s booth at the World Artificial Intelligence Conference on August 30, 2019 in Shanghai. (Image credit: TechNode/Shi Jiayi)

Alibaba is planning to offer 500 million new ordinary shares as a part of its global offering on the Hong Kong stock exchange, and will use the ticker, “9988.”

Why it matters: The company’s 2014 debut on the New York Stock Exchange was the largest global initial public offering (IPO) yet. Alibaba’s secondary listing on the Hong Kong exchange will open the opportunity for users and stakeholders within its ecosystem across Asia to invest and participate in its growth.

  • Alibaba is aiming to raise $13 billion through the listing, people with knowledge of the matter told TechNode.
  • The offering will help the company to tap into capital pools in Asia and create a nearly round-the-clock market for global investors to trade Alibaba shares.

“As we celebrated Alibaba’s 20th anniversary in September, we shared our strategic goals for the next five years: serve global consumers, of which more than 1 billion will be Chinese consumers, and facilitate more than RMB 10 trillion of consumption on our platforms. Our longer-term goals by the year 2036 are to serve 2 billion consumers globally, create 100 million jobs, and provide the necessary infrastructure to support 10 million small businesses to become profitable on our platforms.”

—Daniel Zhang, Alibaba Group Chairman and Chief Executive Officer in a letter to investors

Details: Alibaba’s Hong Kong-listed shares will be fully fungible with its New York-traded American Depositary Shares (ADS) which carry a ratio of one to eight ordinary shares, the company said in a statement emailed to TechNode.

  • Of the total new shares to be issued in Hong Kong, 12.5 million will be offered publicly for retail investors. The total number of such shares can increased to a maximum of 50 million or 10.0% of total shares under the offering.
  • In addition, 487.5 million shares will be available for global subscription. An over-allotment option will be granted to international underwriters to purchase up to an additional 75 million new shares.
  • The offer price for the public retail offering will be no more than HK$188 ($24) per share, while the international tranche may be issued at a price higher than HK$188.
  • Alibaba will set the international offer price by Nov. 20, 2019, Hong Kong time.
  • The proceeds will be put toward boosting user growth and engagement, digital improvements, and continuing long-term innovation and investments.
  • The company has not yet disclosed the date for its IPO debut. Sources from global media outlets expect the IPO at the end of this month.

Context: After missing out listing on the Hong Kong stock market “with regret” in 2014, new reforms opened opportunities for Alibaba’s return, Zhang has said.

Alibaba readies $13 billion Hong Kong IPO