Alibaba will operate in Suqian City, Jiangsu Province, China on December 29, 2023.
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Hong Kong listed stocks Alibaba Shares fell more than 5% on Thursday amid reports that the Chinese tech giant was considering selling convertible bonds to raise $5 billion.
The stock ended the session down 5.24% after falling more than 6% earlier. Bloomberg reports.
In pre-market trading in New York, Alibaba’s shares listed on the New York Stock Exchange fell 2.03% as of 05:44 a.m. ET.
The company was the third-worst performer on the day on the Hang Seng Index, according to London Stock Exchange data.
Bloomberg, citing anonymous sources, said the bond issuance could be launched as soon as this week.
CNBC could not independently confirm the report, and Alibaba did not immediately respond to a request for comment.
Earlier this week, Chinese e-commerce rival JD.com made a similar move US$1.75 billion convertible senior notes issuance It matures in five years and has a coupon rate of 0.25%.
Alibaba weathered a storm in 2023, which included a massive corporate structural overhaul that ultimately led to an 86% plunge in fourth-quarter net profit.
To attract investor support, the company announced in February that it would expand its stock buyback program by $25 billion.
Earlier this year, Alibaba Chief Executive Eddie Wu pledged to “revitalize” the company’s growth through further investments. Early indications are that this strategy will take effect in the March quarter.
Further capital is likely to boost activity in the core e-commerce segment of the company, which has been grappling with a domestic economic slowdown caused by cautious spending by Chinese consumers. China’s overall economy is beginning to slowly recover from strict Covid-19 restrictions, with the latest official data showing that China’s online retail sales increased by 11.5% year-on-year. According to China’s state news agency Xinhua.
Alibaba is also ambitious to further capture market share in the hot markets of artificial intelligence and cloud services. Following the launch of the first iteration of the technology in April 2023, the company earlier this month released the latest version of the Unified Qianwen Large Language Model, a piece of software that can power artificial intelligence applications.
It recently joined an escalating price war in China, slashing the cost of a range of LL.M. courses by up to 97%. Reuters reports.
Since the beginning of this year, Alibaba’s stock price has been rising, rising 4.03% on the Hong Kong Stock Exchange and 6.67% on the New York Stock Exchange.
— CNBC’s Arjun Kharpal contributed to this report
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