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Alibaba’s Hong Kong Shares Rise 6.6 Percent on Debut in Heavy Volume

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Alibaba Group’s Hong Kong shares closed their first trading session up 6.6 percent from the issue price after this year’s largest stock sale.

Shares worth HKD 13.99 billion (1.39 billion pounds) were traded, according to Refinitiv data, making it the third biggest debut on record for the Hong Kong market.

Alibaba is already the fifth most-traded company in New York this year, averaging $2.6 billion a day, Refinitiv data showed.

The Chinese e-commerce giant has raised at least $11.3 billion from its secondary listing, which has been seen as a vote of confidence in Hong Kong’s financial future amid six months of increasingly violent anti-government protests.

The figure could climb to as much as $12.9 billion if Alibaba chooses to exercise an over-allotment option within 30 days of the start of trade..

Alibaba shares closed at HKD187.60 which was 6.6 percent higher than the issue price of HKD 176 per share.

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On Monday its US American Depository Shares (ADS) closed at $190.45. With eight Hong Kong shares per ADS, that implied a price of HKD 186.30 per share.

Alibaba’s debut ranks third in the city for first-day turnover behind insurer AIA Group in 2010 which recorded HKD 49.38 billion in turnover, China Literature was second with HKD14.17 billion when it debuted in November 2017, Refinitiv data showed.

The average daily turnover on the Hong Kong Exchange this year has been $11.6 billion, according to the exchange’s third-quarter earnings report, implying that Alibaba on Tuesday accounted for more than one-tenth of total market turnover.

The funds raised from the Hong Kong listing will help Alibaba, Asia’s biggest company by market value and world’s seventh-largest, invest more in a range of online services.

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But analysts also note that the establishment of a base of investors in Hong Kong and China could function as a backup for the company should its shares be hit in New York amid the US-China trade dispute.

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The Hong Kong and New York stocks are fungible, which means investors can buy and sell the same shares on either exchange and that pricing on the exchanges are unlikely to diverge too far from each other.

A long time coming
The premium to New York reflects the willingness of investors in the city and Asia to take on the stock of a company they know well, market participants said. Expectations are also high that it will get a lift in valuation when it becomes eligible for trading in the Stock Connect that links Shanghai and Shenzhen with Hong Kong next June.

“There will be some upside for the company’s price in Hong Kong but I don’t think we will see the shares double or triple in a year,” said Geo Securities Chief Executive Francis Lun.

At Tuesday’s listing ceremony, CEO Daniel Zhang noted the Hong Kong debut had been a long time coming.

Alibaba had hoped to initially list in Hong Kong, but eventually chose New York for its record-breaking $25 billion initial public offering in 2014 after its unusual governance structure failed to win acceptance from Hong Kong regulators.

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The loss of the listing triggered years of argument and consultations that resulted in rule changes last year.

“Thank you Hong Kong and thank you HKEX. Your reform and innovation of the capital markets in the past few years has made it possible for us to realise what we missed five years ago,” Zhang said at the listing ceremony.

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The Hong Kong listing has surpassed other large stock sales this year, ranking ahead of Uber Technologies $8.1 billion IPO and $5.7 billion IPO for Anheuser-Busch InBev’s Asian brewing business in Hong Kong.

In its prospectus, Alibaba said it would use the funds raised to increase its investment in online delivery and local services platform Ele.me and in online travel group Fliggy.

Alibaba also plans to spend more on developing Youku, one of the leading online video platforms in China.

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Small retail investors were enthusiastic buyers of the deal, subscribing for 40 times the shares they were originally allotted and eventually taking 10 percent of the deal.

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Facebook Bans Major US Anti-Vaccination Group Children’s Health Defense for Spreading Covid-19 Misinformation

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Facebook-owner Meta said Thursday it had kicked one of the most influential US anti-vaccination groups off the social media network for spreading Covid-19 misinformation. The Children’s Health Defense (CHD), which has been a critic of Covid vaccines, immediately accused Meta of stifling its free speech rights. “Facebook is acting here as a surrogate for the federal government’s crusade to silence all criticism of draconian government policies,” CHD founder Robert Kennedy Jr., nephew of late president John F. Kennedy, said in a press release.

Meta spokesperson Aaron Simpson told AFP that the group’s accounts at Facebook and Instagram were shuttered on Wednesday. The ban came after repeated violations of Meta’s misinformation rules.

CHD said its social media accounts were followed by hundreds of thousands of people, and claimed the action by Meta came as a surprise.

In a release, the group shared a screen capture showing messages stating the accounts were suspended for violating Meta policies regarding “misinformation that could lead to real world harm.”

CHD contended that the ban could be related to a lawsuit it filed against Meta accusing the tech giant of infringing free speech rights by relying on US Centers for Disease Control regarding what Covid-19 information is scientifically backed.

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The anti-vaccine group has appealed a lower court ruling against it in the litigation, according to legal filings.

In other news, US teens have left Facebook in droves over the past seven years, preferring to spend time at video-sharing venues YouTube and TikTok, according to a Pew Research Center survey data out Wednesday. TikTok has “emerged as a top social media platform for US teens” while Google-run

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YouTube “stands out as the most common platform used by teens,” the report’s authors wrote.Pew’s data comes as Facebook-owner Meta is in a battle with TikTok for social media primacy, trying to keep the maximum number of users as part of its multi-billion-dollar ad-driven business.

The report said some 95 percent of the teens surveyed said they use YouTube, compared with 67 percent saying they are TikTok users.Just 32 percent of teens surveyed said they log on to Facebook — a big drop from the 71 percent who reported being users during a similar survey some seven years ago


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Elon Musk Said to Target Advertising Tech Firms in Twitter Suit Over Takeover Deal

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Billionaire entrepreneur Elon Musk, who is attempting to walk away from his deal to acquire Twitter, is seeking documents from advertising technology firms as part of his quest to gain more information on bot and spam accounts on Twitter, according to filings in a Delaware court on Thursday. Twitter has sued the Tesla chief executive, who has accused Twitter of hiding information about how it calculates the percentage of bots on the service, for attempting to walk away from the $44 billion (roughly Rs. 3,50,900 crore) agreement. A trial is scheduled for October 17.

Musk’s lawyers have subpoenaed both Integral Ad Science (IAS) and DoubleVerify for any documents or communications on their involvement in reviewing accounts or participation in any audit of Twitter’s user base.

IAS and DoubleVerify, which are both based in New York, use technology to independently verify that digital ads are viewed by real people. Advertisers use the services to ensure the ads they pay for are seen by potential customers and not automated bots.

Twitter, IAS and DoubleVerify did not immediately respond to requests for comment.

In response to a tweet by a user who questioned how Twitter audits its service and also linked to a Reuters story on Musk targeting the ad firms, Musk tweeted: “Those are the questions that Twitter is doing everything possible to avoid answering …”

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In a countersuit earlier this month, Musk claimed that Twitter’s monetizable daily active users are 65 million lower than what the company has touted. Twitter has said it stands by its disclosures.

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The metric measures users who log onto Twitter through the website or apps that are able to serve ads or used paid products like subscriptions, according to Twitter filings.

© Thomson Reuters 2022


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Snap Said to Shut Down Development of Pixy Flying Selfie Drone Camera: Report

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Snapchat parent Snap will stop future development of its Pixy flying selfie drone, the Wall Street Journal reported on Thursday, citing people familiar with the matter. Pixy, which costs $230 (roughly Rs. 18.300), will continue to be sold in its current iteration, according to the report.

The news comes nearly four months after the Santa Monica, California-based company launched the pocket-sized Pixy camera, which can fly a few feet above its user to take photos and videos.

Snap declined to comment on the report.

Rising costs and other economic woes have forced companies to curb their marketing spend, hurting ad-reliant online companies such as Snap, Facebook-parent Meta, Twitter, and Pinterest.

Last month, Snap had warned of “incredibly challenging conditions” due to the current economic turmoil and increasing competition after reporting disappointing results.

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The company, which is reeling from privacy changes made to Apple’s iPhone, had also said it would significantly slow hiring, invest in its advertising business and find new sources of revenue as part of its belt-tightening efforts.

On Monday, Snap said it had reached 1 million subscribers for its Snapchat premium subscription, after launching the service in June as a new source of revenue.

Social media companies including SnapTwitter, and Meta Platforms, which all earn the majority of revenue from selling digital advertising, are facing a weakening ad market due to record-high inflation causing brands to reign in their marketing spending.

Snap’s shares dropped 25 percent last month after disappointing second quarter earnings, as it suffered from weaker advertising demand than Wall Street had expected. Chief Executive Evan Spiegel said the company would work to speed up revenue growth, in part through new sources of revenue.

See also  Facebook Brings WhatsApp Integration to Its Revamped Crisis Response Tool

© Thomson Reuters 2022

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