Alibaba falls 10% after HK$80 billion share sale for AI buildout
What's new: The company priced 710 million new shares at HK$112.70, with the deal set to close Wednesday.
Alibaba shares slid as much as 10% in Hong Kong on Monday after the company priced an HK$80 billion, or about $10.2 billion, placement of newly issued shares to non-U.S. investors. The Chinese tech group is selling 710 million new shares at HK$112.70 each, below Friday's close of HK$123, and the stock was later down 8.4% at the placement price. Alibaba said it will use all net proceeds to expand its full-stack AI capabilities, including AI infrastructure. The fundraising comes days after the company posted a 75% drop in June-quarter profit as AI spending rose, with capital expenditure up 75% to 67.7 billion yuan. Last year, Alibaba set a plan to invest at least 380 billion yuan in cloud computing and AI infrastructure over three years.