Alibaba Group’s shares fell nearly 10% to HK$110.80 on Monday after the company announced a HK$80 billion ($10 billion) share offering, the largest primary stock sale by a Hong Kong-listed company on record.
The transaction involves the issuance of 710 million new ordinary shares priced at HK$112.70 each, sold to at least six institutional investors outside the United States. The placement price represented an 8.4% discount to Alibaba’s closing price on the prior Thursday.
The proceeds from the offering will be directed entirely toward expanding the company’s artificial intelligence infrastructure, including its full-stack AI capabilities. The move follows a mixed quarterly earnings report last week, which highlighted progress in AI and cloud computing but showed a sharp slowdown in its core e-commerce business.
Renowned investor Michael Burry disclosed on Sunday that he had fully exited his Alibaba position, stating the stock would need to fall by half before he would reconsider. He also criticized the HK$80 billion capital raise.
The broader market reflected the pressure, with Hong Kong’s Hang Seng Index dropping 2% on Monday, with Alibaba remaining the index’s largest component by weighting.
