Alibaba to Launch Massive $20 Billion Listing in Hong Kong as It Looks for More Capital
When it comes to e-commerce companies, then China’s Alibaba is in a league of its own, and after having become the biggest online retailer and tech company in the world’s second largest economy, it is all set to grow further. However, to fuel that growth, the company has now decided to have a second listing in the Asian financial hub of Hong Kong, and according to reports, the company is targeting a massive $20 billion listing. Back in 2014, Alibaba had listed in the New York Stock Exchange and had commanded a $25 billion valuation.
While e-commerce may be the company’s primary business, Alibaba has now morphed into one of the biggest investors in technology in China and are planning to invest aggressively in the industry in the years to come. In addition to that, the current troubles in China due to the trade war with the United States has further eroded growth in the tech sector in the country, and massive investments are needed to kick start the next stage of growth. This listing will give Alibaba the sort of war chest that will allow it to keep investing aggressively in the tech sector for many years to come.
The company is planning to file its listing papers in Hong Kong in the latter part of this year and while; it is unclear whether this listing is related to the current trade war, analysts have not ruled it out. A research head at the brokerage BOCOM International stated,
For Chinese companies listed in the United States, one has to prepare a contingency plan. Given most of the Alibaba, investors are in Asia; it makes sense to come closer to your home base and give investors an option to trade in the same time zone.
On the other hand, some sources have stated that the $20 billion figure is vastly overblown and in fact, the follow on share sale is probably going to be in the $10 billion to $15 billion range. Alibaba has a market value of $400 billion since it first listed in the United States and if it lists in Hong Kong, then Chinese investors will also be able to buy shares in the company with far more ease.