Alibaba's $13 Billion Secondary Listing Expected This Month

The Chinese e-commerce giant, which just celebrated another record sales festival, has begun to take orders from institutional investors for its previously delayed Hong Kong offering.

CapitalWatch Staff
    Nov 13, 2019 9:00 AM  PT
Alibaba's $13 Billion Secondary Listing Expected This Month
author: CapitalWatch Staff   

Alibaba Group Holding Ltd. (NYSE: BABA) is now taking bids from institutional investors for its upcoming secondary listing worth up to $13.4 billion.

The offering will take place in the protest-ridden Hong Kong before November ends and will be the city's largest floatation since 2010, as reported by Bloomberg today.  

In a filing with the U.S. Securities and Exchange Commission on Wednesday, Alibaba said it aims to sell 500 million newly issued ordinary shares, 12.5 million of which will be offered in a Hong Kong public offering and the rest internationally. The exact pricing of the shares is yet to be determined.

Alibaba's Hong Kong offering was previously expected to take place in August, but the company has postponed its listing amid the ongoing protests in the city, which have led to stagnation in its economy. Reuters reported, citing unnamed sources, that Alibaba is monitoring the situation and assessing the risks.

With a mission "to make it easy to do business anywhere," Alibaba said it intends to boost its online delivery and local services platform Ele.me, travel platform Fliggy and video platform Youku with the proceeds from the offering.

Jointly underwriting the global offering are China International Capital Corp. Hong Kong Securities Ltd., Credit Suisse (Hong Kong) Ltd., Citigroup Global Markets Asia Ltd., J.P. Morgan Securities (Asia Pacific) Ltd. and Morgan Stanley Asia Ltd.

In 2014, Alibaba lifted off in the world's largest IPO in New York, raising $25 billion. Its Hong Kong offering will be the company's major move after its leader of 20 years, legendary Chinese billionaire Jack Ma, has retired. Ma has previously said that he sees Alibaba's stock as undervalued on Wall Street and has been considering a secondary listing prior to his step down as chairman.

Shares in the giant were trading at $182.31 per American depositary share by noon on Wednesday, down more than 2%.

Earlier this week, Alibaba reported another record sales on Singles' Day. In a post on its corporate news page, Alizila.com, the e-commerce giant said it generated $38.4 billion in gross merchandise volume in 24 hours on 11.11, China's largest annual shopping festival.

That was up 25% from the 2018 Singles' Day, even amid the general slowdown in China's economy. As analyst Lou Haverty, creator of Financial Analyst Insider, told CapitalWatch in late October, "Credit levels can extend consumer spending growth even in the face of a decline in GDP."

Haverty also noted that Alibaba's IPO in Hong Kong doesn't "necessarily" mean that it will shy away China-based companies from listing in New York.

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(Image: Alibaba)

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