TradingKey – On July 4, Alibaba Group (BABA.US; 9988.HK) announced the successful completion of its zero-coupon exchangeable bond issuance , raising HKD 12.023 billion (approximately USD 1.53 billion). The bond is expected to settle on July 9 , and is linked to shares in Alibaba Health (00241.HK). If fully exchanged, the transaction will account for around 12% of Alibaba Health’s issued share capital, although Alibaba will still retain a controlling stake.

【Alibaba Intraday Chart (5min) | Source: TradingView】

Market reaction has been cautious — by the time of writing (July 4), Alibaba’s stock had fallen 3.97% over two days, while Alibaba Health dropped 9.44%, reflecting investor concerns over potential share dilution and near-term pressure from the bond issuance.

Analyst Takeaways

• Morgan Stanley noted that the zero-coupon structure helps ease short-term financial strain, but the uncertainty around share conversion could weigh on Alibaba’s stock performance in the near term.
• UBS pointed out that while Alibaba Health shows promise in AI-driven healthcare, challenges remain, particularly as Trump’s proposed tariffs on Chinese goods may complicate Alibaba Cloud's global expansion plans.
• CICC stated that the bond issuance reflects Alibaba’s confidence in its long-term strategic direction. However, the success of this move will ultimately depend on Alibaba Health’s future financial results and its ability to deliver on growth expectations.

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