Five years after its arrival on the NYSE, Alibaba could make a secondary listing in Hong Kong, according to Bloomberg. Jack Ma’s firm could raise up to $ 20 billion.
2014: Alibaba prefers Wall Street in Hong Kong
In September 2014, the Chinese giant of e-commerce Alibaba arrives on Wall Street and raises 25 billion dollars, a record which still remains to beat today. Alibaba prefers New York to the Hong Kong Stock Exchange (HKSE) because the regulators of the latter do not allow the listing of companies that exercise the double voting right. A common principle among companies Tech – including Alibaba – built with little capital from the founders, who still want to keep control.
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Except that after its introduction on Wall Street, Alibaba nearly doubles in size and becomes the largest Chinese company listed on the stock market. Its market value eventually exceeds more than 400 billion dollars. Worse still for the HKSE, the success of Alibaba encourages other Chinese companies to try the American adventure: the great rival Tencent in December 2018, the Chinese manufacturer of electric cars Nio a few months earlier, or even the online pharmacy 111, for example.
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2018: Hong Kong softens its rules for listed companies
A significant failure, therefore, for Hong Kong, which consequently announces in 2018 a relaxation of its rules and authorizes the multiple voting right for listed companies. As a result, Chinese giants Xiaomi electronics and online sales Meituan Dianping go public on the HKSE the same year.
Earlier in the year, Jack Ma was already thinking about an IPO in his home country. This could even happen in the summer of 2018.
2019: new financing channels for Alibaba
Today, a second listing in Hong Kong would give Alibaba access to new financing channels and pursue its technology investments. It would also bring him better access to loans from Asian banks.
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This IPO would also allow investors in mainland China access to a national giant of Tech and a stock market success, including the Stock Connect. This channel links since 2014 the trading platforms of Hong Kong, Shanghai and Shenzhen. A victory also for China, which today encourages its technology giants to be listed on national stock exchanges.
IPO in escalation of the trade war
Alibaba is reported to be working with financial advisors and may file an IPO in Hong Kong for the second half of 2019. The size of the IPO could be somewhere between $ 10 billion and $ 15 billion, according to a cited source by Reuters.
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The IPO of Alibaba in Hong Kong would arrive in full escalation of the trade war between China and the United States. Under pressure from the Trump administration, Google recently cut the bridges with Huawei, China’s giant smartphone and Washington’s pet peeve. The United States says since 2018 suspect the group to allow Chinese intelligence to use its equipment to spy on mobile communications worldwide.
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