Alibaba’s cash call comes off

published 21 November 2019

Jack Ma, CEO of Alibaba © PHILIPPE LOPEZ/AFP via Getty Images

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".

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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 .

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri