ALI HEALTH (00241.HK) shares plummeted 5.09% in early trading on Friday, following Alibaba Group's announcement of a significant zero-coupon exchangeable bond offering linked to Alibaba Health Information Technology Limited's ordinary shares.

Alibaba Group Holding Limited revealed that it has priced an offering of HK$12.023 billion (approximately US$1.54 billion) in zero-coupon exchangeable bonds. These bonds, set to mature on July 9, 2032, are directly linked to the ordinary shares of Alibaba Health Information Technology Limited, which is listed on the Hong Kong Stock Exchange. The bonds are expected to be listed on the Vienna MTF within 60 days of issuance.

The sharp decline in ALI HEALTH's stock price suggests that investors are concerned about potential dilution of share value or changes in Alibaba Group's commitment to its health technology subsidiary. Alibaba Group stated that the estimated net proceeds of HK$11.9 billion from this offering will be used for general corporate purposes, including investments in Cloud infrastructure and international commerce businesses. This allocation of funds away from the health technology sector may have contributed to the negative market reaction for ALI HEALTH shares.