Chinese e-commerce powerhouse, Alibaba Group, raised up to $12.9 billion in a landmark listing in Hong Kong and is set to price its shares at $24 each, causing a 2.8 percent discount to their New York close. This has been the largest share sale in the aforementioned region in nine years and a record breaking cross-border secondary share sale. Previously, Alibaba had already completed the historical feat that shattered records of raising a sum of $25 billion in the NYSE (2014). Therefore, it is without surprise that Alibaba's shares in Hong Kong as compared to its counterpart in New York (ADS), is merely worth around one-eighth ($24 as to $185).
Due to Hong Kong's current state of unrest, this deal appears to boost themselves following their slide to their first ever recession in a decade and the everlasting anti-governmental protest. This secondary listing has projected Alibaba to receive funds totaling up to $11.2 billion before the 'greenshoe' option is established. If the so called 'greenshoe' over-allotment option were to take place, Alibaba could potentially receive a colossal sum reaching approximately $13.4 billion.
Despite Hong Kong Stock Exchange's disclosure on their rate's sharp increase (>1%), company shares in this region is still pressurized by protests, social upheavals, and the uncertainty of the America-China trade agreement. As a result, investors living within Hong Kong's crowded streets of civil unrest are now head over heels into purchasing Alibaba's debut, in which the company scheduled to list the shares on November 26. Subsequently, this also indicates that companies and investors are relentless, even after facing the neverending protests.
Sources:
Business Times
Reuters
Tribune
Want to know more about capital market? Drop the topics you are interested in the comments!