Alibaba's stock fell sharply at the start of the week's trading, after the company announced its plan to raise about HK$80 billion, equivalent to US$10.2 billion, through a new share offering to finance its expansions in the field of artificial intelligence.
The stock fell 9% to HK$111.90, deepening its losses since the start of the year to about 21.55%.
Alibaba plans to offer 710 million new shares at HK$112.70 per share, with the offering to be completed on Wednesday. The issue price represents a discount compared to the previous closing level of the share, which has increased selling pressure in the market.
The offering is one of the largest new share issuances by a Hong Kong-listed company, reflecting the scale of resources Alibaba is seeking to provide to accelerate its investments in artificial intelligence and related infrastructure.
The move comes as part of the company's efforts to boost its investments in artificial intelligence and related infrastructure, amid intensifying competition among Chinese technology companies to develop their capabilities in this field.
Around 40% of the offering is expected to be allocated to investors who adopt long-term strategies, along with major sovereign wealth funds in Europe, Asia and the Middle East.
The stock's decline reflects investor concerns about the impact of the new share issuance on shareholders' equity, at a time when the company is betting that AI investments will provide new engines for growth in the coming period.
