Alibaba Raises $10.2 Billion, Shares Plunge 8.5%

Chinese online trading giant Alibaba has completed a massive capital raise worth approximately $10.2 billion, marking the largest secondary share offering recorded in Hong Kong since 2021. The company announced that it will use the proceeds to finance and accelerate the development of its artificial intelligence (AI) infrastructure.

As part of the offering, the company sold 710 million shares at approximately $43 per share, reflecting a 3.6% discount compared to the closing price in the United States. The deal, open only to non-US investors, attracted significant interest, with institutional demand three times higher than the number of shares offered. The transaction was led by investment banks HSBC, Morgan Stanley, UBS, and CICC.

Despite the high demand, the move triggered market volatility: Alibaba's stock plunged 8.5% on Monday, the sharpest daily decline recorded since the beginning of 2025. In response, management signaled confidence in the company's future as Chairman Joseph Tsai purchased $3.6 million in shares, and CEO Eddie Wu acquired an additional $15 million worth of stock.

The capital raise is part of a broader strategy in which Alibaba has committed to investing over 380 billion yuan (approximately $56.5 billion) over three years into chips, data centers, and language models. To fund this expansion, the company has been liquidating assets, including the sale of its gaming division for at least $1.5 billion and retail holdings worth $2.6 billion.

These investments are already yielding results: Alibaba's cloud division recorded 38% revenue growth last quarter, and AI-related revenues have shown triple-digit growth for the 11th consecutive quarter. Meanwhile, major competitor Baidu stated it has no plans for a similar fundraising move, citing sufficient cash reserves.