Reportedly, Alibaba is looking to conduct a stock split, which is a move it states can aid in helping with further fundraising activities. Under the plan, the Chinese e-commerce titan would split one usual share into eight. That means the present number of ordinary shares—which sums up at 4 Billion—would surge to 32 Billion. Investors would require voting on this at the company’s yearly general meeting in Hong Kong. If sanctioned, the stock split would go into action no later than July 15, 2020, Alibaba reported. Alibaba is allegedly looking into an IPO (initial public offering) in Hong Kong that can raise as much as $20 Billion.
In a statement, Alibaba said, “The board of directors is planning the Share Subdivision to augment the flexibility for the firm in future capital market commotions. Amongst other reasons, the one-to-eight share subdivision would increase the number of shares obtainable for issuing at a lower per share price, and the committee believes that this would increase suppleness in the firm’s capital raising activities, counting the issuance of new shares.” There are many reasons that firms carry out stock splits. One of them is to raise the number of shares with the expectation of attracting new financiers. And the other one is to decrease the price of every share if an organization feels that it has become very high.
Recently, Alibaba was in news for reshuffling management and the CFO might manage strategic investment unit. China’s Alibaba lately said its CFO Maggie Wu will oversee the company’s investments and strategic acquisitions unit, as a part of a business and management restructure at the e-commerce giant. We would take over from Joe Tsai—Executive Vice-Chairman—who will help Wu in her new role, Alibaba asserted in a statement.
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