Alibaba said in a press release on Tuesday that the IPO will be completed by the end of the year.
CEO Daniel Zhang said the business wants to list in Hong Kong “in the interest of nurturing a larger and more diverse investor base to share in Alibaba’s development and future, especially from China and other Asian countries.”
Zhang pointed out that financial hubs that share openness and diversity include Hong Kong and New York. We have full confidence in China’s economy and future, and Hong Kong serves as the springboard for Alibaba’s international plan.
Zhang did not mention Washington’s threats to delist some Chinese tech companies from NASDAQ in his news release. Foreign companies that do not comply with US accounting rules face the prospect of delisting from US exchanges, according to authorities in the United States. According to analysts, if the US and China do not reach an agreement that would allow US authorities to review the financial audits of Chinese businesses, more than 250 Chinese companies, including Alibaba, are at risk of being delisted in the US.
“It should help reduce the delisting risk in the US,” Bo Pei, an analyst at US Tiger Securities, said of Alibaba’s action.
The analyst also pointed out that mainland investors cannot trade Alibaba stock through the Shenzhen-Hong Kong Stock Connect Stock program due to the company’s current secondary listing status. On the contrary, “in the main listing, Alibaba is likely to be included, which will allow mainland investors to participate in the stock more easily.”
In 2014, when Alibaba went public for the first time, it was the largest initial public offering (IPO) in history.
There was a 5.3% increase in the value of Alibaba stock at the end of trading in Hong Kong. Premarket trade on Tuesday saw US-listed shares rise 3.4% to $104.49, down 14.9% for the year.