Alibaba shares fall 8% after $10 billion Hong Kong share sale

Alibaba's shares experienced a 8% drop in early Hong Kong trading on Monday following the company's completion of a HK$80 billion ($10.21 billion) share sale. The transaction, priced at HK$112.70 per share, represents an 8.4% discount to the last close of Alibaba's Hong Kong-listed stock. This largest-ever primary follow-on offering by a Hong Kong-listed company, and the third-largest globally this year, is aimed at funding AI-related development.

Alibaba plans to use the proceeds to bolster AI infrastructure, including expanding related services. The share placement follows the company's recent quarterly earnings report, which revealed a 75% decline in net profit, primarily due to AI-related spending. Alibaba Cloud, Alibaba's digital technology and AI division, recently launched its third data centre in South Korea, as part of a pledge to invest 380 billion yuan ($56.54 billion) over three years into AI infrastructure.

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