The numbers behind the nerves
The share placement didn’t arrive in a vacuum. It landed just days after Alibaba reported June-quarter earnings that left investors doing a double-take.
Revenue climbed 9% to RMB268.95 billion. But net profit cratered 75% year-over-year to RMB10.5 billion, roughly $1.6 billion. The culprit: capital expenditures surged 75% to RMB67.68 billion, or about $10 billion, almost entirely driven by AI infrastructure buildout.
The company reported negative free cash flow of negative $6.6 billion for the quarter.
US-listed ADRs had already dropped over 8% on August 22 following the earnings release. The Hong Kong share placement announcement a couple of days later added fresh selling pressure.
