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Alibaba Postpones Hong Kong IPO Amid Protests

Anthony Russo 2019-08-22 02:30 AM

The stock in Alibaba Group Holding Ltd. (NYSE: BABA) slid $1.02 intraday Wednesday, to $176.05 per share, on news that the company has postponed its anticipated listing in Hong Kong.

Alibaba's secondary IPO, which the company has not officially commented on, is now expected as early as in October. The company is expected to raise between $10 billion and $15 billion, according to Reuters. 

The biggest e-commerce company, based in China, delayed its listing due to the continuous protests occurring in Hong Kong regarding the controversial extradition bill that is currently suspended indefinitely by Carrie Lam, Hong Kong’s chief executive.

"It would be very unwise to launch the deal now or anytime soon,” an unnamed source familiar with the matter told Reuters.

The source also said, “It would certainly annoy Beijing by offering Hong Kong such a big gift given what’s going on in the city.”

Though the bill remains suspended, it has not been fully withdrawn, which have caused protests to continue. The protestors want nothing short of Lam’s resignation, as reported by various media.

“I have heard you loud and clear and have reflected deeply on all that has transpired,” Lam said at a press conference in June. “For this, I offer my most sincere apology to all the people in Hong Kong,” she added.

The bill allows Hong Kong to extradite suspects to countries with which it does not have a formal extradition agreement. If the bill were to go into effect, mainland authorities would have the power to arrest anyone in Hong Kong and charge the suspect with an extraditable crime. 

After riots occurred with pro-democracy protestors at Hong Kong’s International airport last week, CNBC reported that more than 700 protestors have been arrested since June.  

Last week, the Hang Seng Index fell to its lowest level since the beginning of January.

Alibaba released its second quarter earnings recently, revealing revenue of $16.3 billion for the three months through June, up 42 percent from a year ago. Net income attributable to ordinary shareholders was $3.02 million, or $1.17 per share, up 56 percent year-over-year.