Alibaba Prices $10.2B Offering, Stock Falls Hours After Burry Exit

Michael Burry's Scion Asset Management moved its entire Alibaba $BABA position into JD.com months ago and now says he will not shift capital back, calling share issuance "a new paradigm again for BABA" and warning the company's return on invested capital will keep falling as a result, according to a post on X. Scion had built Alibaba into its largest holding in mid-2024, liquidated the position in Q1 2025 while buying bearish puts against it, then reopened a stake and added to JD.com in April, per Benzinga's review of SEC filings.
Hours after Burry's post, Alibaba said on Sunday, Aug. 23 that it planned to raise HK$80 billion, or roughly $10.2 billion, in a Hong Kong share placement to fund its AI buildout, according to Reuters — the largest primary follow-on offering ever by a Hong Kong-listed company and the third-largest globally this year, behind only Alphabet and Intel. Alibaba issued 710 million new shares at HK$112.70 each, an 8.4% discount to the prior close, with the offering nearly three times oversubscribed and total demand reaching roughly $28 billion, including close to $6 billion from sovereign wealth funds and long-only investors. Alibaba shares opened down roughly 8% in Hong Kong trading on Monday, Aug. 24, falling as much as 10% intraday.
On its earnings call the prior week, Alibaba management said it had already committed close to half of its three-year AI capital spending plan, adding that the expected payback period had narrowed to roughly two-and-a-half years from three, according to a BigGo Finance report.