The e-commerce giant Alibaba’s (NYSE:BABA) Hong Kong-listed shares closed 5.24% lower on Thursday, fueled by speculation surrounding the potential issuance of convertible bonds to raise $5B.
Adding to the worries, Alibaba’s shares on the NYSE fell more than 2.5% in premarket trading on Thursday.
Bloomberg, citing undisclosed sources, reported Alibaba’s discussions with investment banks regarding the sale of bonds convertible into US-listed stock, possibly announcing the offering as early as this week.
The primary goal, according to sources, is to finance share repurchases and support growth initiatives.
Earlier this year, Alibaba expanded its share buyback program, adding $25B for stock repurchases, marking one of China’s largest-ever buyback programs.
Earlier in the week, JD.com (JD), Alibaba’s Chinese e-commerce competitor, took a similar path by announcing a $1.75B convertible senior note offering with maturity of five years and a 0.25% coupon rate.