Shares of Alibaba (BABA) opened sharply lower on Monday, dropping about 8% to HK$113.10 in Hong Kong trading.

The decline follows the company's weekend announcement of a share placement plan, under which it will issue 710 million new shares at HK$112.70 per share, raising approximately HK$80 billion (around US$10.2 billion). Net proceeds will be fully allocated to AI infrastructure construction and investments in full-stack AI capabilities. The placement price represents a discount of roughly 8.4% to Friday's closing price, marking the first equity placement since Alibaba's Hong Kong listing in 2019.

Market analysts believe the combination of increased short-term share supply and the discounted pricing will continue to pressure the stock. Ahead of the settlement on August 26, the placement price level is expected to become a key battleground between bulls and bears.

Adding to the headwinds, renowned investor Michael Burry—the inspiration for the film "The Big Short"—revealed he has fully exited his position in Alibaba, citing concerns that the stock is overvalued. In a Substack post on Sunday, August 23, Burry stated he had shifted his capital into JD.com (JD) instead. He wrote: "I had planned to move most of my money back into Alibaba in a month or two, but that's no longer the case. Alibaba's stock would need to fall by half before I regain interest."