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Alibaba Made IPO Magic in 2014. Can it Repeat History with Secondary Hong Kong Listing?

On the heels of a record-shattering Singles Day that topped $38 billion in sales, Alibaba Group has revealed new plans for a secondary public listing on the Hong Kong Stock Exchange.

The Chinese retail and tech conglomerate plans to sell a total of 500 million shares, expected to generate as much as $15 billion. The funds raised, Alibaba said, will bankroll ongoing innovation projects, facilitate digital transformation initiative, improve operational efficiency at its businesses, and strengthen strategies to foster user growth and engagement, key metrics of corporate health.

On Tuesday, Hong Kong regulators gave Alibaba the green light to proceed with the public offering, a move that would allow local investors and Alibaba shoppers across Asia the opportunity to acquire shares. And it’s a move that could help perk up the business community, which has seen its share of economic turmoil stemming from violent protests in Hong Kong that have decimated luxury retail in the shopping capital.

According to a regulatory filing with the Securities and Exchange Commission Wednesday, Alibaba will sell 487.5 million shares in the U.S., where shares of Alibaba are already listed. The balance of 12.5 million shares, or 2.5 percent of the total shares to be sold, will be reserved for Hong Kong investors through a public offering on the Hong Kong Stock Exchange. Underwriters have the option to sell an additional 75 million shares, depending on investor demand.

In the filing, Alibaba said that in the 12 months ended March 31, 2019, it has debuted new retail initiatives to re-engineer its retail commerce operations in China.

New retail represents the convergence of online and offline retail by leveraging digitalized operation systems, in-store technology, supply chain systems, consumer insights and the mobile ecosystem to provide a seamless shopping experience for consumers,” Alibaba said in the filing.

The e-commerce giant also acquired Kaola, a Chinese import e-commerce platform, to broaden its offerings and strengthen its leadership in cross-border retail commerce. It also operates e-commerce platforms Trendyol in Turkey and Daraz in Pakistan and Bangladesh.

Alibaba maintains a logistics services network enabling global fulfillment, on-demand delivery for consumers, cloud services through Alibaba Cloud, and digital media and entertainment platforms, such as video platform Youku and online entertainment platform Alibaba Pictures.

Alibaba shares will continue trading on the New York Stock Exchange—where its 2014 blockbuster IPO raised a then-record $21.8 billion on the first day of trading—following the Hong Kong public offering, slated for Nov. 26. Alibaba’s NYSE listing is still considered its “primary listing venue,” according to the regulatory filing.

Alibaba shares were trading mid-day Wednesday in the range of $186.97 on the NYSE, representing a market capitalization of $478.04 billion.

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