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QuestionsCategory: Investor PsychologyCorporate Action Event: Convert BABA shares to 9988 shares
Kulesha Premasinghe asked 4 months ago

Hi Fifth Person,
First of all thanks for creating investment content and helping newbie investors like myself in improving our investment knowledge!
I have a query with regards to 15 BABA shares I own on Saxo. There is corporate action (conversion) where they convert BABA to 9988 shares. 1 BABA share will give 8 HK shares.  Refer to screenshot attached.  I have 3 questions relating to this.

  1. Why are they offering this conversion of shares from NYSE to HK
  2. What are the pros/cons of converting
  3. In HK exchange, one lot is 100 shares. So if I convert my 15 BABA shares (15*8=120 HKD shares). I will have 120 shares. But if I want to sell in future, I can sell only 100 shares right, then I am stuck with 20 shares which I cant do much?

Hope you can share some advice relating to this query. Thanks in advance!

1 Answers
Victor Chng answered 4 months ago

Hi Kulesha,

1.Alibaba is dual listed hence it give you the option to choose which exchange you want it to be traded.

2.There is no pro/con in converting as both share have the same value. If you are worried about Alibaba being delisted from the NYSE due to the pressure from US government then converting the share will remove this risk for you (This is the only advantage I see at the moment).

3.You can sell the 20 shares in the odd lot market but the price will have a wider bid/ask spread.