Jack Ma has been out of subscribers since October, and with his empire receiving special attention from the Chinese government, Alibaba is forecasting a stock sale of at least $ 5 billion. Four people familiar with the operation told Reuters, and one of them estimates the amount could reach $ 8 billion depending on the attractiveness of investors.
Details are not yet known, two of those familiar with the operation say it is expected to be valid for 10 years and documents will be available as soon as next week. One respondent said that Alibaba wants to show that, despite recent actions against the group, the company is “still doing fine and having the support of some investors.” It remains to be seen who these investors will be.
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Given the reorganization of Ant Group, Alibaba’s finance division, whose $ 37 billion IPO was blocked by Beijing, investor fears would be as unsurprising as the company’s needs seem reassuring. In addition, the Chinese authorities are examining Ant’s investments in a dozen companies and are considering forcing him to pull out of some.
“Investors will need Jack Ma to appear in public in any form”
In December 2020, Alibaba announced it would increase its shares on the stock exchange from $ 6 billion to $ 10 billion. Oshadhi Kumarasir, advisor to LightStream Research, explains that Alibaba’s long-term debt matured in November. For him, this funding is a logical step, although he recognizes the need to create trust. “I’m more pragmatic, however, and given the current regulatory instability, I would still be concerned about long-term engagement with Alibaba,” says Oshadhi Kumarasir.
“Investors will need Jack Ma to appear publicly so they can be certain that this new investment will be well received,” says a credit analyst for a European bank who specializes in Asia and is not allowed to communicate with the media, wanted anonymous stay. He believes prices should be high given the economic situation, while he believes that “Alibaba will remain an attractive company to invest in over the long term.”
On December 6, 2021, Alibaba’s share price on the Hong Kong Stock Exchange rose 4%, but fell 5.6% over the next three sessions.