Hedge Funds Salivate Over Arbitrage Trade in Alibaba
- Discount will lure long-short investors as well as long funds
- ‘Only real money’ to be made is from the discount: Aequitas
Photographer: Alain Jocard/AFP via Getty Images
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An expected price gap between Alibaba Group Holding Ltd.’s Hong Kong and U.S. shares is fueling a colossal arbitrage trade.
In a Hong Kong sale of more than $10 billion, the Chinese e-commerce giant may offer a 5% discount to its New York-listed shares, according to media reports. Alibaba is scheduled to set a price on Nov. 20 and start Hong Kong trading on Nov. 26.