×

Alibaba Delays Hong Kong Share Listing (Report)

Against a background of political tension in Hong Kong, Chinese tech and entertainment giant Alibaba is reported to have delayed its planned share listing in the Asian financial capital.

Reuters cited two unnamed sources in a report Wednesday on the decision to postpone. One said that the delay was approved at a board meeting the weekend before last week’s financial results announcement. The source said that had the listing gone ahead, it would have irked the Chinese government in Beijing.

The source said that the company is now looking at an October launch date.

Alibaba has its primary share listing on the New York Stock Exchange and, with shares quoted at more than $177 apiece, it is valued at $460 billion. The planned listing in Hong Kong would have been a secondary listing that added to the company’s coffers and brought it closer to its core operations in mainland China. Commentators have suggested that Alibaba could raise $10 billion to $15 billion of fresh capital from a Hong Kong share sale, though the company has not confirmed any particular fundraising target.

Sources close to the company point to other advantages from listing in Hong Kong, not least of which would be access to the shares for mainland Chinese investors through the so-called stock connect system between Hong Kong’s and China’s stock exchanges. A Hong Kong listing could also mitigate a degree of political risk if U.S. investors turn hostile to Chinese companies, and if an escalation of the U.S.-China trade war leads to restrictions on Chinese companies accessing U.S. capital markets.

In the five years since Alibaba launched its IPO in New York, the Hong Kong Stock Exchange has changed its rules to allow the trading of shares such as Alibaba’s which have restricted voting rights. The company has approved an eight-for-one share split that would make its stock easier to trade in Hong Kong.

It’s therefore an ironic twist that the current political troubles in Hong Kong appears to have delayed Alibaba’s listing plans there. It has not yet filed a prospectus in Hong Kong.

The city – a special administrative region of China after its handover back to the mainland from Britain in 1997 – has endured more than two months of pro-democracy and anti-police brutality protests, which at times have turned violent. The protests started with public anger against the Hong Kong government’s proposed extradition bill, but have since become a broader movement against heavy-handed police tactics and what many say is the rapid erosion of the large degree of autonomy that was supposed to have guaranteed Hong Kong’s way of life for 50 years following the handover.

Alibaba recently announced strong profit and revenue growth for the second quarter of its financial year. In the April-to-June period, revenues were up by 42% to $16.7 billion. Earnings per share were $1.83, compared with analysts’ estimates of $1.50. Alibaba Pictures Group, which spans some of the group’s entertainment businesses, already has a separate share listing in Hong Kong and Singapore.

More Biz

  • Thanks a Million Quibi

    Jeffrey Katzenberg's Quibi Is Ready to Launch, but Will Viewers Bite?

    Quibi has spent more than $1 billion so far gearing up for what founder Jeffrey Katzenberg touts as a category-defining pay-TV service of the future, uniquely built for smartphones. It’s not clear when, or even whether, the startup will recoup that. In the months leading up to Quibi’s still-planned April 6 debut, industry insiders privately [...]

  • Comedians Live Streaming Self Quarantine

    How Comedians Are Adapting to Entertain Fans While Self-Isolating

    On March 11, comedian Jim Gaffigan was in Bogotá, Colombia, in the midst of his worldwide Pale Tourist tour when he received a call from his manager that Argentina was closing its borders in the wake of the coronavirus pandemic, and his upcoming show there was canceled. He had a choice: fly to São Paulo, Brazil, for [...]

  • 1920s Flu Pandemic

    What Coverage of the Spanish Flu Pandemic Can Tell Us About Coronavirus

    In Ronald D. Moore’s reimagined “Battlestar Galactica,” the ragged remnants of the human race often respond to adversity by invoking an article of their faith: “All this has happened before. All this will happen again.” As we face the real-life coronavirus pandemic, that mantra rings true. All this has happened before: a highly contagious, deadly [...]

  • Comic-Con atmosphere

    Comic-Con Still on for July Despite Coronavirus Fears

    The organizers of San Diego Comic-Con are still “hopeful” that it will take place in July as planned, despite mounting fears that putting on the largest fan convention in the country would be dangerous given the current coronavirus climate. Events of all kinds have been canceled around it, yet Comic-Con remains scheduled to take place [...]

  • Coronavirus Work From Home Placeholder

    Are Virtual Markets Working for Distributors and Buyers Navigating Coronavirus?

    When the film and TV industry emerges from self-isolation to a forever altered landscape, one silver lining will be the online savvy newly gained by traditionally digitally-shy businesses, some of whom have reacted with lightning speed to devise virtual showcases. A drive towards virtual events initially manifested in early March across disrupted festivals such as [...]

More From Our Brands

Access exclusive content