Alibaba’s cash call comes off

Despite the ongoing violence in Hong Kong, demand for Alibaba’s secondary listing has been so strong that the Chinese e-commerce giant founded by Jack Ma (pictured) will stop taking orders from retail investors earlier than planned. The listing is expected to raise up to $13bn to supplement the $25bn mustered in the 2014 initial public offering (IPO) on the New York Stock Exchange.

It “isn’t a surprise” that Alibaba has decided to list in Hong Kong, says Jacky Wong in The Wall Street Journal. The company only opted for New York for its 2014 IPO because Hong Kong regulators “refused to compromise on their one share, one vote principle”. But they changed the rules in 2018, so the way is clear for Alibaba, which has a dual-class “partnership” structure that effectively consolidates power in the hands of the founding shareholders, to come back to Hong Kong.
What’s more, the “increasing hostilities” between China and the US, which have included the “outlandish” suggestion from the White House that Chinese companies be de-listed from US exchanges, means that it makes sense from a business perspective for Alibaba to “diversify its funding sources”.
Alibaba needs the money, say Carol Zhong and Lulu Yilun Chen on Bloomberg. “The engines of China’s economy are sputtering” and it needs to fend off local rivals “nipping at its heels”.
Alibaba is facing competition from Tencent and Baidu in cloud computing and entertainment, from Meituan Dianping in food delivery and from “everyone” when it comes to finding promising start-ups .

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