Alibaba drops 8% after $10.2 billion Hong Kong share sale
Why it matters: Alibaba will put all proceeds into AI chips, infrastructure and models after profit fell 75% amid heavy spending.
Alibaba shares fell about 8% in Hong Kong on Monday after the Chinese tech giant priced an HK$80 billion ($10.2 billion) sale of 710 million new shares to fund its artificial intelligence push. The stock was sold at HK$112.70 apiece, a discount to Friday’s close, and the deal ranks as the biggest primary follow-on offering by a Hong Kong-listed company. Alibaba said all net proceeds will go to its full-stack AI buildout, including chips, infrastructure and model development. The placement is expected to close Wednesday. The fundraising comes days after Alibaba reported a 75% drop in June-quarter profit as AI-related capital spending surged, with capex rising 75% to 67.7 billion yuan.