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Alibaba
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Alibaba seeks one-to-eight stock split as the first step toward a secondary listing that may raise as much as US$20 billion

  • Alibaba will split its ordinary shares in a one-to-eight subdivision
  • One ordinary share with a par value of US$0.000025 will be subdivided into eight ordinary shares with a par value of US$0.000003125, increasing the number of ordinary shares from 4 billion to 32 billion

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A monitor displays Alibaba Group Holding’s signage on the floor of the New York Stock Exchange (NYSE) in New York on Tuesday, January 2, 2018. Photo: Bloomberg
Louise Moon
Alibaba Group Holding, operator of the world’s largest e-commerce platform, has applied to split its ordinary shares, part of a move to increase the flexibility of its capital raising activities, including the issuing of new shares.
The New York-listed Chinese e-commerce giant is proposing to split each of its ordinary shares into eight, according to a statement on its website. Under the changes, one American Depositary Share (ADS), which currently represents one ordinary share, will represent eight ordinary shares. Voting rights of shareholders will remain the same.

“The board of directors is proposing the share subdivision to increase the flexibility for the company in future capital market activities,” said the company, which owns South China Morning Post, in its statement. “Among other reasons, the one-to-eight share subdivision will increase the number of shares available for issuance at a lower per-share price, and the board of directors believes that this will increase flexibility in the company’s capital raising activities, including the issuance of new shares.”

The move comes after Bloomberg reported that Alibaba has appointed China International Capital Corporation and Credit Suisse Group to lead a secondary listing in Hong Kong, which could raise as much as US$20 billion, according to people familiar with the matter. The Hangzhou-based company has reiterated that it does not comment on market rumours, while the Hong Kong Exchanges & Clearing Limited (HKEX), the operator of Asia’s second-largest capital market, declined to comment.

As of June 7, Alibaba had 4 billion ordinary shares valued at US$0.000025 each, forming a US$100,000 share capital. The share split would raise the number of shares to 32 billion at a par value of US$0.000003125 each. The company’s shareholders will vote for the changes at the annual general meeting on July 15 in Hong Kong. If approved, the change has a year to come into effect.

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