Alibaba soars more than 6% on Hong Kong debut
- Shares in Alibaba surged more than 6% on their first day of trading in Hong Kong.
- The Chinese e-commerce giant raised $11.3 billion after issuing 500 million ordinary shares and 75 million "greenshoe" options, marking the largest listing of 2019.
- One analyst said the listing was "a boost to Hong Kong - both the city and the stock exchange," while others said it could entice more Chinese tech unicorns to list in Hong Kong despite the ongoing disruption.
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Shares in Alibaba surged more than 6% on their first day of trading in Hong Kong as the Chinese e-commerce giant raised $11.3 billion, making it the largest listing of 2019.
Alibaba's stock initially spiked 6.3% in early trading in Hong Kong, before closing 6.6% higher. The company issued 500 million ordinary shares and 75 million extra "greenshoe" options at 176 HKD a piece ($22.50 per share.)
New CEO Daniel Zhang told an audience outside Hong Kong's stock exchange that Alibaba had "returned home to Hong Kong," as riot police stood outside, according to the Financial Times.
Analyst Neil Wilson called the listing "a boost to Hong Kong - both the city and the stock exchange," after mass demonstrations delayed Alibaba's regional debut earlier this year.
"After months of protests, and the London Stock Exchange's dismissive rejection of Hong Kong Stock Exchange's bid, it's a sign that Hong Kong's reputation for listings is not so badly tarnished," Wilson, the chief market analyst at Markets.com, said in an email. He cautioned that Alibaba is still a Chinese company, and "we can't necessarily see this wholly as an international 'vote of confidence' in Hong Kong."
Bloomberg said that after Alibaba's success, Chinese tech unicorns such as TikTok owner ByteDance may be tempted to also list in Hong Kong.
"Alibaba will be the leading light for bringing more companies in," Andrew Sullivan, a director at Pearl Bridge Partners, said to Bloomberg Television on Tuesday. "You may see some new money being allocated. The keen competitor is going to be Tencent, which has historically traded at a premium."
After the success of Tuesday's IPO, the Financial Times said that if Alibaba's bankers trigger an "overallotment option" within one month of the IPO, the number of shares on offer could rise by 15%, netting the company a further $1.6 billion in funding.
Click here to watch Alibaba trade live in New York.