Key facts
- Alibaba shares fell 8% after finalizing a $10.21 billion share placement in Hong Kong.
- The placement is intended to fund artificial intelligence development and infrastructure.
- The deal is the largest primary follow-on offering by a Hong Kong-listed company.
- Alibaba's quarterly net profit declined 75% due to AI-related spending.
- Shein launched its Hong Kong IPO, aiming to raise up to $1.77 billion.
Alibaba's shares declined 8% in early Hong Kong trading after the company finalized an HK$80 billion ($10.21 billion) share placement. The tech giant priced 710 million new shares at an 8.4% discount to its last close, with the entire proceeds earmarked for artificial intelligence development, including infrastructure expansion.
This placement marks the largest primary follow-on offering by a Hong Kong-listed company and the third-largest globally this year. The move comes after Alibaba reported quarterly earnings showing a 75% drop in net profit, largely due to AI-related spending. The company has accelerated its payback projection for AI investments to two and a half years, driven by surging demand for AI services. Alibaba Cloud recently launched its third data center in South Korea as part of a broader pledge to invest 380 billion yuan ($56.54 billion) over three years in AI infrastructure.
In parallel, online fast-fashion retailer Shein has launched its Hong Kong initial public offering, aiming to raise up to HK$13.86 billion ($1.77 billion). The company plans to sell 280 million shares at a maximum price of HK$49.50, with pricing set for August 31 and a debut expected on September 1.