Chinese tech giant Alibaba raised $10 billion in Hong Kong’s biggest-ever secondary share sale in order to keep up in the global AI race.
However, some traders appeared unconvinced by the company’s plans, with its stock tanking almost 10% in trading on Monday, its steepest single-day drop in more than a year.
Investors worldwide fret that tech firms’ revenues are struggling to keep up with the AI spending spree, which has added substantially to their debt piles, part of the reason some have pivoted to selling equity as Google also did in June.
“If end uses and costs remain so uncertain, the ultimate scale of investment, the financing needs and the eventual payoff remain finger-in-the-wind estimates,” a Reuters columnist wrote.
