Chinese e-commerce giant Alibaba currently has a number of listings in major markets across the globe, helping it reach a market value of more than $400 billion. New reports are suggesting that the Chinese company may be looking into establishing a second listing in Hong Kong; a listing that could very well dwarf the biggest initial public offerings (IPOs) this year.
According to a report from Bloomberg, Alibaba is apparently looking to raise more than $20 billion through another listing on the Hong Kong Stock Exchange. This will be the company's second listing on the exchange, one which would be bigger than the IPOs of companies such as Uber, Pinterest, and Lyft combined.
Reports citing sources close to the matter have revealed that Alibaba may be looking into adding liquidity and diversifying its funding channels as it expands further into other businesses. Alibaba has so far expanded beyond its core retail business. The company has invested heavily in industries such as internet services and cloud computing in an attempt to take on veterans such as Amazon, IBM, and Google.
A new listing in Hong Kong would apparently make a lot of sense given that Asian investors know the company and its operations better than those in other countries. Alibaba is currently one of the largest tech firms in the world and was one of the largest IPOs on the New York Stock Exchange in 2014. The company went public and managed to raise $25 billion at a time when the firm's market value was only around $168 billion.
Alibaba initially chose to list in New York given that Hong Kong had a "one share, one vote" policy in place. The company's founder Jack Ma apparently wanted to have more control over the firm. Hong Kong has since lifted that policy, which means that companies have different voting rights for individuals and large shareholders.
Market analysts have stated that the second listing in Hong Kong would be highly beneficial for the city. A secondary listing would also end up enticing other tech startups that want to launch their own IPOs. Reports have revealed that Alibaba may file a listing application sometime in the second half of the year. However, Alibaba has neither confirmed nor denied the reports.
Alibaba recently reported its fourth quarter and fiscal year earnings this month. The company revealed numbers that topped analysts' forecast, with its cloud unit gaining a revenue increase of 76 percent. The company's shares have increased by 13 percent for the year. However, it has declined by 25 percent from its peak in June of last year, mostly due to the ongoing trade tensions between China and the United States.
