Chinese technology giant Alibaba broke the record for the largest public offering in 2019 on Tuesday in Hong Kong.
Alibaba Group Holdings Limited broke the Uber record set in May at $8.10 billion, with a $11.2 billion IPO in the recession-hit city of Hong Kong and nearly six months of political turmoil. Alibaba’s overall increase in IPOs could be about $13 billion higher, if its IPO banks were exercising options to buy more shares.
Alibaba shares jumped more than 6% for the first time Tuesday morning on the Hong Kong Stock Exchange. Charles Li Xiaojia, chief executive of the Hong Kong Stock Exchange before trading, listing Alibaba as “a family member finally coming home.”
Hong Kong was the first choice of Alibaba founder Jack Ma for his list in 2014 before the company moved to New York after a dispute with HKEx over the selection of board members. Alibaba has since reiterated its desire to go to Hong Kong. “As a result of the continuous innovation and changes to the Hong Kong capital market, we are able to realize what we regrettably missed out on five years ago,” Alibaba CEO Daniel Zhang said in a statement on Tuesday.
Alibaba’s IPO came amid economic and political turmoil in Hong Kong. Hong Kong’s stock market rose on Monday after a relatively weak weekend, but the Hang Seng Index ended 0.3 percent lower on Tuesday, when lunchtime demonstrations broke out in shopping malls, on the streets in Hong Kong and at the port in Kowloon Bay. About 200 protesters appeared.
” I applaud Alibaba for taking the step to list in Hong Kong at a time when a lot of people have lost confidence […] in what’s going on in Hong Kong as a market,” said Mary Manning, portfolio manager at Ellerston Capital.
“We continue to see HKEx as a primary listing venue for mainland corporates to raise capital offshore and a gateway for access to the mainland capital markets,” said Michael Wu, senior equity analyst at Morningstar Investment.
Alibaba said in a statement that it plans to use the IPO funds to expand beyond e-commerce and go to other consumer-focused services such as travel booking and live video, as well as business-focused services such as supply chain, logistics and ecosystems. To pay for merchants worldwide.
The company is also stepping up its investments in cloud computing and machine learning, part of a larger project to develop Alibaba’s “digital economy” that says it has reached 70% of the Chinese population thanks to 730 million active annual consumers of e-commerce sales.