Alibaba reportedly postpones its rumored $20 billion listing amid Hong Kong unrest

FILE PHOTO: Alibaba founder Jack Ma and CFO Maggie Wu react as the company's IPO begins trading at the NYSE in New York

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FILE PHOTO: Alibaba founder Jack Ma and CFO Maggie Wu react as the company’s IPO begins trading at the NYSE in New York
source
Reuters

Chinese e-commerce giant Alibaba will postpone its rumored upcoming listing, as mass protests continue to rock Hong Kong.

Two unnamed sources with knowledge of Alibaba boardroom activity told Reuters the company will delay its plans to raise US$20 billion by listing on the Hong Kong Stock Exchange.

The original plan of a late August listing could be delayed until October, although no formal timeline has been agreed on, Reuters said on Wednesday. Asked to respond to the report, an Alibaba spokesperson told Business Insider the company “does not comment on market rumors”.

The report follows a similarly unconfirmed revelation, first published by Bloomberg in May, that the retailer was considering a capital raise in order to boost liquidity, working with financial advisors on the confidential plan. Alibaba declined to comment on the report, according to Bloomberg.

The reported postponement comes as violent protests continue in Hong Kong for the 11th straight week with a heavy police response. The Hong Kong Free Press has reported local police have used tear gas against protesters in the most recent clashes in the Kowloon district.

The violence is impacting local business as protesters withdraw their funds from ATMs and banks and convert them to US dollars.

Alibaba successfully launched its initial public offering in New York in September 2014 in what was then the most successful listing in history at US$25 billion. The IPO raised US$21.8 billion before surging 38% on its NYSE debut.

Should it go ahead, the Hong Kong listing will see Alibaba become closer to investors at home in China, who have been restricted from buying equity in the US-listed retailer. It would take advantage of a rule change by the Hong Kong Stock Exchange in 2018, allowing dual-class tech stock listings.

Were it not for the unrest in Hong Kong, now could be an opportune time for Alibaba to approach the market.

The company managed to add 98 million customers to its book over the last 12 months and generate $US3.1 billion in net profit, despite the escalating US-China trade war.