Alibaba Hong Kong Shares Plunge Over 9% on $8 Billion Share Placement and Full Liquidation by 'The Big Short' Figure

Alibaba opened sharply lower by over 9% on the Hong Kong stock exchange today (24th), starting at HK$113.10 per share and dropping as low as HK$110.80. The steep decline was mainly driven by its new share issuance plan and a significant liquidation by a well-known market investor.

Over the weekend, Alibaba announced plans to issue 710 million new shares at HK$112.70 per share, raising approximately HK$80 billion (about $10.2 billion USD). After deducting commissions and related expenses, the net proceeds of around HK$79.7 billion will be allocated 100% toward AI infrastructure development and total cost optimization.

The offering price represents an 8.4% discount to Alibaba's closing price on the previous Friday (21st), marking the company's first equity fundraising since its 2019 Hong Kong listing.

Market analysts suggest that the increased short-term supply of shares, combined with the discounted pricing, will continue to pressure the stock's performance. Prior to the settlement on Wednesday (26th), the placement price level may become a key battleground between bulls and bears.

The new shares were placed with non-U.S. institutional investors outside the United States, and the net proceeds will be fully invested in building full-stack AI capabilities and infrastructure.

However, Michael Burry, the famed investor and real-life figure behind the movie 'The Big Short,' stated that Alibaba's stock is overvalued and revealed he recently liquidated his entire position in the Chinese tech giant, shifting instead to a substantial increase in holdings of JD.com.

Burry posted on Substack on Sunday (23rd): 'I was planning to move most of my capital back into Alibaba in a month or two, but I won't be doing that now. I won't be interested again until Alibaba's stock price drops by half.'