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According to a new filing, Alibaba Group Holding Ltd (NYSE: BABA) subsidiary Alibaba Pictures Group will be selling $1.6 billion shares of stock to select investors to raise money to fund for media-related acquisitions.
Plenty of cash
Alibaba Pictures is low loaded up with cash. The company’s last round of fundraising in 2014 brought in $807 million. Reuters reports that the company has spent very little of that money on film and TV series production so far.
Alibaba Pictures, previously known as ChinaVision Media Group, has said that it does not have specific acquisition targets in mind at this time.
Impact on Alibaba shares?
The announcement that Alibaba Pictures would be selling 4.2 billion shares of stock sent the company’s stock tumbling on the Hong Kong exchange on Thursday. After shares were halted on Tuesday prior to the announcement, trading resumed on Thursday, and shares plummeted as much as 11 percent.
The stock had nearly doubled over the past year prior to the news.
In the U.S., shares of the parent company are trading down less than 1 percent in the pre-market on Thursday. Even after an 11.8 percent rebound in the past month, Alibaba remains down more than 12.7 percent in 2015.
Other beneficiaries
While Alibaba Pictures shareholders might have disliked the news, shareholders of Credit Suisse Group AG (NYSE: CS) and Morgan Stanley (NYSE: MS) should be pleased. The two companies will be the placing agents for the offering and stand to earn more than $8 million on the deal.
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.
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