Alibaba Group shares fell nearly 10% to HK$110.80 on Monday after the company announced a HK$80 billion (approximately $10 billion) equity placement, the largest primary follow-on share offering ever conducted by a Hong Kong-listed company.
The placement, priced at HK$112.70 per share—a discount of roughly 8.4% to the prior Thursday closing level—drained liquidity from the broader market. Alibaba’s stock became the biggest drag on the Hang Seng index, which declined 2% on the day.
The proceeds from the issuance of 710 million new ordinary shares will be directed entirely toward AI infrastructure expansion, including the development of the company’s full-stack AI capabilities. The placement was sold to at least six institutional investors outside the United States, according to company disclosures.
The announcement compounded existing pressure on Alibaba, which had already faced a mixed reaction to its latest quarterly earnings. While the company reported strength in artificial intelligence and cloud services, its core ecommerce business showed a marked slowdown, adding to investor concerns.
Investor Michael Burry disclosed on Sunday that he had fully exited his Alibaba position, stating the stock would need to fall by half before it could regain his interest. Burry specifically cited opposition to the HK$80 billion capital raise as a key factor in his decision.
