Order books for its US$12 billion Hong Kong share sale have already been covered "multiple times", sources with direct knowledge of the matter said last Friday, as the e-commerce group kicked off its campaign for the secondary listing.
Alibaba, the China-based e-commerce colossus, will raise US$13.8 billion when it lists its company on the Hong Kong Stock Exchange, the biggest share sale in Hong Kong in nearly a decade, later this month.
Order books for its US$12 billion Hong Kong share sale have already been covered “multiple times”, sources with direct knowledge of the matter said last Friday, as the e-commerce group kicked off its campaign for the secondary listing.
Alibaba, which began trading on the New York Stock Exchange in 2014, will offer 500 million new ordinary shares. Alibaba’s New York Stock Exchange IPO raised US$25 billion and is among the largest IPOs of all time.
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The company expects to grant the international underwriters an option to purchase an additional 75 million new shares. That would raise about $1.8 billion, bringing the total to about $13.8 billion.
The Alibaba IPO in Hong Kong would easily exceed the $8 billion raised by Uber Technologies (UBER) on the NYSE in April, which was the biggest US IPO to date this year.
Alibaba’s US depositary shares will continue to be listed and traded on the NYSE, where Alibaba has a market capitalisation of more than US$450 billion.
The company said it plans to officially set pricing terms on 20 November. In a statement issued on Friday, the e-commerce business said the public retail price will be no more than 188 Hong Kong dollars per share, which converts to US$24.
Shares will trade on the Hong Kong exchange on 26 November. It will trade under the ticker 9988 – the numbers in both Cantonese and Mandarin Chinese are considered auspicious.
The company, founded in former CEO and chairman Jack Ma‘s bedroom, plans to use the proceeds “for the implementation of its strategies of driving user growth and engagement, empowering businesses to facilitate digital transformation, and continuing to innovate and invest for the long term”.
In a letter to investors, CEO Daniel Zhang commented on the company’s objectives.
“As we celebrated Alibaba’s 20th anniversary in September, we shared our strategic goals for the next five years: serve global consumers, of which more than 1 billion will be Chinese consumers,” Zhang wrote.
“Our longer-term goals by the year 2036 are to serve 2 billion consumers globally, create 100 million jobs, and provide the necessary infrastructure to support 10 million small businesses to become profitable on our platforms.”
Alibaba’s decision to list its company in Hong Kong has raised eyebrows but it makes sense since most of its business is in China and it is easier for investors in mainland China to buy and sell Alibaba shares in Hong Kong than the US.