A comprehensive report by Wu Yuxin
Alibaba’s listing in Hong Kong reveals new progress.
On October 31, according to Reuters, people familiar with the matter said that Alibaba Group (NYSE: Baba) would raise $10 billion to $15 billion by listing in Hong Kong as early as November. People familiar with the situation said Alibaba would seek listing permission from Hong Kong Exchanges and Clearing Ltd after the double 11 and would not hold pre roadshow meetings, because many investors are already familiar with Alibaba and the listing time is likely to be at the end of November or the beginning of December. Sources warned that Alibaba’s listing plan is still subject to market conditions.
According to Reuters, Alibaba had planned to launch its IPO in late August, but it was delayed due to the situation in Hong Kong. Given that investors in the Hong Kong market often borrow money in anticipation of a large sale of shares, such a large offer from Alibaba may also have an impact on the liquidity of the Hong Kong financial system and the much watched Hong Kong Interbank Offered Rate (HIBOR).
In response, Alibaba responded to surging news reporters and did not comment on market rumors.
In response to Alibaba’s plan to go public in Hong Kong in November, the Hong Kong Stock Exchange responded: “we do not comment on individual companies.”
According to the surging news reporter, on July 16 this year, Alibaba announced that the annual general meeting of Alibaba approved the increase of the authorization data of common stock, and approved the plan of “one split eight” common stock speculation, including all options issued outside, restricted stock units (RSUs) and details of share splitting. Alibaba’s shareholders’ meeting decided to increase the number of ordinary shares to 32 billion.
The so-called share split is to cut the stock, increase the number of shares, reduce the share price, but the total value remains the same. After the share split, the par value and the purchase and sale price of each share will be reduced, and the number of issued shares will be increased. Generally speaking, stock split can reduce the threshold for investors to enter. Tencent has split shares in 2014, each of which is divided into five shares. Alibaba said that the board of directors proposed to carry out share splitting to improve the flexibility of the company’s future capital market activities. The “one to eight” share splitting will increase the number of shares that can be issued at a lower price per share, which the Board believes will improve the flexibility of the company’s financing activities (including the issuance of new shares). The move is believed by the industry that Alibaba is preparing for the listing of Hong Kong shares.
In 2007, Alibaba’s B2B business was listed on the Hong Kong main board and delisted from the Hong Kong Stock Exchange in 2012. In September 2014, Alibaba, the 15th anniversary of its establishment, was listed on the New York Stock Exchange, setting a record for the largest IPO of US stocks, with the stock code of “Baba”.
Previously, there were rumors that Alibaba would go public again in Hong Kong. Alibaba wanted to go public in Hong Kong in the early years, but the structure of different rights of the same shares of Alibaba was inconsistent with the rules of the Hong Kong Stock Exchange at that time. Alibaba turned to go public in the United States. Today, Alibaba’s market value is more than 440 billion dollars.
The loss of Alibaba also allowed the HKEx to start brewing changes. In April 2018, the Hong Kong Stock Exchange revised the listing rules to allow companies with the same shares and different rights to go to Hong Kong for listing. Since then, Xiaomi and meituan became listed companies with the same shares and different rights that landed on the Hong Kong Stock Exchange in July and September 2018 respectively.
In July this year, Li Xiaojia, chief executive of the Hong Kong stock exchange, said that one of the development goals of the next stage of the exchange is to bring back Chinese listed companies wandering in foreign markets, such as Alibaba and Baidu, which are “wandering abroad” but “rooted” in China.
A comprehensive report by Wu Yuxin