Alibaba Completes Historic HK$80 Billion Share Sale to Boost AI Infrastructure

Alibaba Group Holding completed its HK$80 billion (US$10.2 billion) share placement on Wednesday, closing the largest primary follow-on offering ever made by a Hong Kong-listed company, according to a filing with the U.S. Securities and Exchange Commission confirming the placing of 710 million newly issued ordinary shares to non-U.S. persons outside the United States, at HK$112.70 per share. sec

Alibaba (9988.HK) said it will put 100% of the net proceeds into its AI capabilities, with roughly 60%, or HK$47.9 billion, going toward expanding global computing infrastructure, and the remaining 40%, or HK$31.9 billion, toward hyperscale AI data centers and upgraded cloud infrastructure. sec

The shares priced at an 8.4% discount to Alibaba's last close, and the stock fell 8% in early Hong Kong trading once the placement was finalized, Reuters reported. Alibaba increased the size of the offering after it was oversubscribed, with strong demand from sovereign wealth funds among the investors, people familiar with the matter told Reuters. Investing.comAOL

Globally, the deal ranks as the third-largest primary share sale this year, trailing only offerings from Alphabet and Intel, Reuters reported. Investing.com

Alibaba is a constituent of both the Hang Seng Index and the Hang Seng TECH Index, HKEX's benchmark for the city's listed technology and AI companies, making the placement one of the largest single supply events those gauges have absorbed this year.

The raise follows Alibaba's most recent quarterly results, in which the company said it had already spent nearly half of its three-year capital expenditure plan and moved up its projected payback period on AI investment to two-and-a-half years from three, Reuters reported. Investing.com

Alibaba faces a 90-day lockup on further share sales tied to the placement, according to a report citing people familiar with the matter. Taipei Times