Clearing Out Alibaba, The Prototype Of The Big Short Seller Bluntly Stated That He Cannot Support Alibaba's Massive Financing!

On August 23, Burry stated that he originally planned to move most of the funds back to Alibaba in a month or two, but now he is not. Alibaba's stock price must drop by half for interest to rekindle. Burry is known for successfully shorting the U.S. real estate market before the 2008 global financial crisis. His remarks come at a time when Alibaba announced plans to raise about HKD 80 billion through a share offering to support its AI investments.

According to Alibaba's disclosures, this transaction will be the largest Tier 1 follow-on offering ever by a Hong Kong listed company, and also the third largest tier 1 follow-on stock offering globally this year, after Alphabet and Intel. Alibaba reported that quarterly profits for the quarter ending June fell by 75%, due to increased capital expenditures related to artificial intelligence.

So far this year, Alibaba's American Depositary Receipts (ADRs) have fallen 18.6%, with an 8.6% drop in a single day last Friday. Its Hong Kong-listed shares have fallen 13.9% year-to-date. Burry disclosed in April that he had opened a position in Alibaba.

Alibaba Group announced on Sunday that it plans to raise approximately HKD 80 billion through a new share placement, with all net proceeds to expand its AI infrastructure and related capabilities. Alibaba separately announced that

the offering price is HKD 112.70 per share, a discount compared to last Friday's Hong Kong market closing price of HKD 123.

The placement is expected to be completed on August 26, with the new shares being offered to at least six professional investors, institutional investors, or other qualified investors outside the United States. Alibaba stated that 100% of all raised funds will be used to consolidate and expand its leading position in the global AI field, including scaling and upgrading AI infrastructure.

Market Insight:

This financing comes as Alibaba continues to increase its investment in artificial intelligence and cloud computing amid increasingly fierce competition in China's tech sector. Newly issued shares enjoy the same rights as existing shares. Additionally, Alibaba has agreed to impose a 90-day lock-up period after the placement is completed.