Alibaba $10.2B Hong Kong Share Placement

Alibaba Group announced a record-breaking primary follow-on share placement on the Hong Kong Stock Exchange, aiming to raise approximately HK$80 billion (US$10.2 billion). The company is offering 710 million shares at HK$112.70 each, a 3.6% discount to its previous closing price. The deal is the largest-ever primary follow-on offering by a Hong Kong-listed company and the third-largest globally this year, after Alphabet and Intel. Alibaba intends to use 100% of the net proceeds to invest in its full-stack AI capabilities, including chips, cloud infrastructure, data centers, and AI model development. The offering was heavily oversubscribed, driven by strong interest from institutional investors and sovereign wealth funds, allowing Alibaba to increase the deal size. Morgan Stanley, HSBC, UBS, and CICC are serving as joint bookrunners. The placement comes after Alibaba reported a 75% plunge in net profit for the June quarter, reflecting massive AI-related capital expenditures. CEO Eddie Lin defended the aggressive spending, noting the need to build compute capacity to capture future growth. The placement was not registered under U.S. securities laws, so American investors were not eligible to participate.