The one-to-eight stock split would mean the current number of ordinary shares — which stands at 4 billion — will increase to 32 billion. It comes ahead of a reported Hong Kong listing.
In the stock split proposal, which was released last month, Alibaba said the move would boost the number of shares at a lower price, but importantly also "increase flexibility in the Company's capital raising activities, including the issuance of new shares."
Gil Luria, director of research at D.A. Davidson & Co., said Alibaba may be thinking about an IPO sooner rather than later, arguing the firm is not getting "favorable multiples" in New York and the U.S.-"I'd say there is a sense of urgency, the stock split appears to be a step in the direction of getting that Hong Kong listing.
There are several reasons that companies carry out stock splits. One is to increase the number of shares with the hope of attracting new investors. Another is to lower the price of each share if a company feels that it has become too high., it priced its shares at $68 a piece. Alibaba shares closed above $173 on Monday.
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