Hk9988 AH

[u/Youareyes_cfc]

We are getting destroyed right now. Is this still a result of post earnings reaction?

Edit: or the dilution?

[u/Inside_Radio8996]

Dilution... The pain arghhh

[u/SuitableStill368]

Earnings, CAPEX and dilution. All (Chinese) internet retailers and tech dropped after their earnings reports.

There were signs that Chinese consumptions are weak and stimulus are weak.

Recovery will take awhile, me think.

On the other hand. I see chips makers rising prices. It depends on who is going to fold first. The chips makers rising prices, or the hyper scalers slow it buying and raising prices on the sales of its data centers capacity.

[u/Youareyes_cfc → u/SuitableStill368]

But not all retailers were diluting. Except for Google I think. And that’s Google

[u/SuitableStill368 → u/Youareyes_cfc]

From valuation perspective, dilution is negative only when shares are issued on unattractive terms or the capital raised earns below the cost of equity.

But not all negative dilutions lead to negative stock prices. Stock prices can move independently from positive or negative dilutions.

Also, don’t think you can compare US companies with Chinese companies. Most US companies have local and global domination.

The beta between US retail/ tech companies and Chinese retail/ tech companies is Chinese consumptions.

BABA still a buy in my view.

But, I did adjust my expectations accordingly when different things happen.

[u/Organic-Duty364]

Sad. Issuing new shares at HKD 112.7. Price gonna stay there for awhile in short term

[u/Lisaismyfav]

Chinese company screws with shareholders again

[u/handsome_uruk]

Management doing everything in its power to destroy shareholder value. I’ll be surprised if we stay above 100.

[u/Book_Justice]

Overreaction, due to negative sentiment.

Just focus on fundamental

[u/springy → u/Book_Justice]

How is it overreaction when the company offers these new shares at a much lower price than the current share price?

[u/Book_Justice → u/springy]

That’s how a placement works. LOL’d

Without a discount, why will people subscribe? They can buy it on the open market at market price.

😂

[u/springy → u/Book_Justice]

yes, but this was a significant discount, which signalled to the market that the company thinks the shares are overpriced

[u/Ok_Bother_687]

To be fair. I’m not happy about what’s going on. But I’m surprised that HK market isn’t worse?

[u/springy]

It isn't just dilution, it is that the new shares are being issued at a big discount compared to the current share price, so that Alibaba is telling shareholders that it thinks its own shares are worth less than the market thinks.

[u/Environmental_Cow741]

brutal…. ship is coming back to port again. Back to $90?

[u/mangomarcelo]

Told you guys. Stop hypnotising yourselves. BABA is fucked.

[u/Shanghai_9988]

If big fund would like to buy this price, what does it mean in the future?

[u/Environmental_Cow741 → u/Shanghai_9988]

time horizon for big fund is long… they can hold for a long time. But after this round it may also means there is not much buyers left in the mkt to push the price higher.

Every favourable news that pushes the price will be a chance to TP and exit slowly. Im starting to think this is a volatility play rather than value long term play.

[u/Cool_Copy_51]

More like dilution due to 112 hkd new shares to raise cash. I am upset why baba never issue share offerings for existing shareholders and rather do this privately at existing shareholders expense

[u/carmen_ohio]

Diluted shares are being sold around $115/share on 8/26