Alibaba raises $10.2 billion in Hong Kong to fund AI push

Corporate ActionAnalyst Impact 4
โดย Reuters·HKUS·Read original
Summary · why it matters

Alibaba launched a share sale worth 80 billion Hong Kong dollars, or 10.2 billion US dollars, yesterday to fund artificial intelligence development, marking the largest follow-on share offering in the Hong Kong stock market and, if completed, the third-largest globally this year after Alphabet and Intel. The company is offering 710 million common shares at 112.70 Hong Kong dollars each, about 3.6 percent below the latest closing price, with Morgan Stanley, HSBC, UBS and CICC acting as underwriters and placing agents. Sources said subscription demand exceeded the shares on offer, prompting Alibaba to increase the deal size, with strong interest from investors including sovereign wealth funds. The company plans to use all net proceeds to invest in AI capabilities spanning chips, infrastructure and AI model deployment, and expects the payback period for AI investment to fall to 2.5 years from 3 years amid rapidly rising demand. Net profit for the April-to-June quarter fell 75 percent from a year earlier after it accelerated AI-related investment. Meanwhile, Michael Burry, the well-known investor and founder of Scion Asset Management, criticised Alibaba shares as overvalued and recently sold the stock from his portfolio while adding to rival JD.com, saying the share price would need to halve before he became interested again, that he disagreed with the new share issuance, and that he expects Alibaba's return on invested capital to keep declining.

Impact on stocks 7

Financials · 3 stocks
Artificial Intelligence · 2 stocks
Alibaba Group Holding Ltd
9988
▼ NegativeCapitalrelevance

Alibaba's share sale dilutes existing shareholders and net profit fell 75% due to AI investment.

Consumer Discretionary · 1 stocks
Jd Com Inc
9618
▲ PositiveCompetitionrelevance

Michael Burry added JD.com while criticizing Alibaba, implying relative preference for JD.

Others · 1 stocks

Theme Impact 5

Off-coverage companies 1

Scion Asset Management, LLCPrivate▼ Negative
Capitalrelevance

Michael Burry's criticism and sale of Alibaba shares reflect his negative view, but Scion itself is not directly impacted.

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