Alibaba’s share price climbed by 7.7% as the market opened for trading the morning after listing on the Hong Kong Stock Exchange. This moves its share price from HKD $176 to HKD $189.50.
Recall that we reported Alibaba’s listing and 500 million new shares on the Hong Kong Stock Exchange. The company also made an allowance for 75 million additional shares to be made available to raise more money if necessary.
The listing was under the stock code 9988 which are auspicious Chinese numbers that depict eternal prosperity.
Alibaba’s progress on the Stock Exchange
In 2014, Alibaba made its Stock Exchange debut in New York where it listed on the New York Stock Exchange (NYSE). The 2014 listing raised a total of US $25 billion for the group while also helping it retain control of the company after going public.
On NYSE, Alibaba was able to raise the biggest initial public offering till date and retain control by the dual-class shares structure available on the bourse.
The structure was not implemented on the Hong Kong Stock Exchange in 2014, which prevented Alibaba from listing there. Alibaba’s 2014 listing move shows that retaining essential control over company activities and decisions was of importance to the management as well as raising funds to further the company’s growth.
However, Hong Kong recently added the dual-class structure on its Stock Exchange. This obviously removed listing restraints because a number of big tech companies which include Meituan Danping and Xiaomi listed on the bourse.
According to CEO of Alibaba, Daniel Zhang, the new implementations on the Hong Kong Stock Exchange were the reasons why Alibaba was eventually able to fulfill its desire of listing in Hong Kong.
“As a result of the continuous innovation and changes to the Hong Kong capital market, we are able to realise what we regrettably missed out on five years ago. Today, we realised what we said then: ‘When conditions allow, we will come back to Hong Kong.’”
Daniel Zhang, CEO of Alibaba
Note, however, that Alibaba has listed in Hong Kong before now. The group listed its B2B platform alibaba.com in 2007. In 2012, Alibaba reclaimed the B2B platform and made it private again.
With the recent listing in Hong Kong, Chinese investors will be able to trade Alibaba shares as soon as it is included in the Stock connect. The connect is a collaboration among Hong Kong, Shenzhen and Shanghai.