Unlocking Future Growth? Alibaba Raises $1.53 Billion via Zero-Coupon Bond to Boost Cloud and Global Expansion
TradingKey – On July 4, Alibaba Group (BABA.US; 9988.HK) announced the successful completion of its zero-coupon exchangeable bond issuance , raising HKD 12.023 billion (approximately USD 1.53 billion). The bond is expected to settle on July 9 , and is linked to shares in Alibaba Health (00241.HK). If fully exchanged, the transaction will account for around 12% of Alibaba Health’s issued share capital, although Alibaba will still retain a controlling stake.
【Alibaba Intraday Chart (5min) | Source: TradingView】
Market reaction has been cautious — by the time of writing (July 4), Alibaba’s stock had fallen 3.97% over two days, while Alibaba Health dropped 9.44%, reflecting investor concerns over potential share dilution and near-term pressure from the bond issuance.
Analyst Takeaways
Morgan Stanley noted that the zero-coupon structure helps ease short-term financial strain, but the uncertainty around share conversion could weigh on Alibaba’s stock performance in the near term.
UBS pointed out that while Alibaba Health shows promise in AI-driven healthcare, challenges remain, particularly as Trump’s proposed tariffs on Chinese goods may complicate Alibaba Cloud's global expansion plans.
CICC stated that the bond issuance reflects Alibaba’s confidence in its long-term strategic direction. However, the success of this move will ultimately depend on Alibaba Health’s future financial results and its ability to deliver on growth expectations.
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