Alibaba proposed 1-to-8 stock split ahead of $20bn listing

Alibaba has proposed a one-to-eight stock split ahead of what is poised to be a $20 billion (£15.75 billion) listing on the Hong Kong stock exchange.

The Chinese ecommerce behemoth is understood to have filed for the multi-billion-pound listing last week, marking what is likely to be the largest follow on listing in the world in seven years.

In light of its upcoming listing, in which it hopes to raise funds to further investment in technology, Alibaba has proposed a one-to-eight split which will be put to a vote of its shareholders on July 15.

READ MORE: Alibaba files for Hong Kong listing that could raise $20bn

In its filing to the Securities and Exchange Commission, it said the split will “increase the number of shares available for issuance at a lower per-share price, and the Board of Directors believes that this will increase flexibility in the Company’s capital raising activities, including the issuance of new shares”.

A stock split allows a company to increase the number of shares available to the market, without devaluing its market capitalisation, which currently stands at $412 billion (£326 billion) while its share price stands at $158.1.

The Chinese ecommerce giant holds the record for the largest initial public offering (IPO) with a $25 billion (£19.69 billion) float in 2014, with its market value nearly doubling since going public.

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