The logo of Alibaba Group is seen at the company's headquarters in Hangzhou, Zhejiang province, July 20, 2018. (PHOTO PROVIDED TO CHINA DAILY)
Chinese mainland e-commerce giant Alibaba Group Holdings proposed a one-to-eight stock split on Monday to help its fundraising effort ahead of an expected initial public offering in Hong Kongthat could raise US$20 billion.
Alibaba is reported to have confidentially filed for the Hong Kong share sale, which is expected to be the city’s biggest stock sale since 2010
Under the plan, the Hangzhou-based behemoth’s existing number of ordinary shares – at 4 billion -- would be increased to 32 billion.
Shareholders will vote on the proposal at the group’s annual general meeting in Hong Kong on July 15 and, if approved, the share split would take effect no later than July 15 next year, Alibaba said in a statement.
The group is reported to have confidentially filed for the Hong Kong share sale, which is expected to be the city’s biggest stock sale since 2010.
Charles Li Xiaojia -- chief executive of Hong Kong Exchanges and Clearing -- did not respond to Alibaba’s reported secondary listing in the SAR on Friday.
“The board of directors is proposing the share subdivision to increase the company’s flexibility in future capital market activities,” Alibaba said.
The statement added that the stock split could help with the issuance of new shares -- a move commonly taken by companies prior to new shares being issued.
As the number of shares increase, the price per share will decline, potentially attracting new investors, while a stock split could boost market confidence for the company.
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Alibaba shares closed at US$158.10 on Friday -- 2.325 times its price of US$68 per share -- when the group went public in New York in 2014.
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