Back in 2013, as Alibaba grew increasingly frustrated with the listing rules of Hong Kong — the company's first choice to host an initial public offering — its vice-chairman Joe Tsai issued a warning.
"The question Hong Kong must address is whether it is ready to look forward as the rest of the world passes it by," he wrote in a blog post.
But Hong Kong Exchanges and Clearing (HKEX) refused to budge, insisting that Alibaba's dual-class share structure put ordinary investors at a disadvantage.
And so the semi-autonomous Chinese territory missed out on the biggest IPO in history.
Now the Chinese ecommerce company, which raised US$25 billion ($38.4b) with a 2014 listing in New York, is re-evaluating the market it left behind, planning a secondary listing in Hong Kong that could raise as much as US$20b.
The move gives HKEX, which revised its rules last year, a shot at the one that got away and a better chance of retaining its crown as the world's top destination for IPOs.
Analysts say Alibaba's return could drive business back to Hong Kong as other Chinese tech companies listed abroad follow suit.
But questions remain over Hong Kong's liquidity and after-market performance — and whether the additional listing is chiefly a political manoeuvre by Alibaba to curry favour with Beijing, as it grapples with Washington over tech and trade.
The groundwork for Alibaba's homecoming was laid last year when HKEX changed its rules to allow companies to issue shares with different voting rights, rather than the traditional "one share, one vote" structure.
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The issuing of various voting rights tends to appeal to technology companies and family-run businesses, where the founders want to retain greater control.
Stephen Chan, a partner at law firm Dechert, said the placement from Alibaba — founded 20 years ago by Jack Ma, now China's richest man — would represent "a major boost for Hong Kong in maintaining its top spot at the global IPO market by amount of funds raised".
He said the move amounted to an endorsement by Alibaba of the listing reforms, and would increase the city's appeal as a venue for landmark listings.
A US$20b share placement by Alibaba would be the fourth-largest in Hong Kong's history and rank the company alongside the likes of Industrial and Commercial Bank of China, the biggest bank in China, and insurer AIA, according to Dealogic data. The next-largest tech listing in Hong Kong, by China Tower, raised just US$7.5b last year.
Yet a secondary placement by the company does not mean IPO candidates will be able to look past Hong Kong's stringent and often expensive vetting when deciding where to debut.
One lawyer who has advised on numerous listings in Hong Kong estimated the cost of preparing to list can reach HK$40 million (US$5m) before a company even submits its application.
"It's substantially easier and cheaper to list in the United States than it is to list in Hong Kong," said a Hong Kong-based banker, who added that the depth of the market was also a consideration.
The value of shares traded on the New York Stock Exchange so far this year is 2.5 times that seen on Hong Kong's main board, according to Financial Times calculations based on Bloomberg data.
There is another compelling reason to opt for the US over Hong Kong: after-market performance.
Take Xiaomi and Meituan Dianping, two large Chinese tech companies that have completed dual-class listings in Hong Kong under the new regime. Both have fallen below their listing prices and failed to keep pace with the benchmark Hang Seng index.
Alibaba's motive for the secondary listing is also pertinent for those who follow the company closely.
One Hong Kong-based tech banker said that while there was no compulsion to sell shares in Hong Kong — given Alibaba's prodigious cash flow and lightly levered balance sheet — it could potentially boost the group's valuation by building a loyal base of local investors.
Another banker said US-Sino tensions made this a particularly shrewd time for Alibaba to tap Hong Kong, if not onshore bourses in Shanghai and Shenzhen.
Regardless of whether the move is primarily a response to regulatory change or a political sop by Alibaba, Chinese tech companies are likely to stay on the sidelines for now.
"Other US-listed Chinese companies will be watching to see how it pans out before we see a wave of them also considering it," said Pruksa Iamthongthong, an investment manager for the Asian equities team at Aberdeen Standard Investments.
She added that while Shanghai was establishing an onshore tech board scheduled to begin trading within a few months, it was unlikely to capture many listings by China's bigger, more established tech companies.
"It depends if you want access to domestic capital or international," said Iamthongthong. "If you want to come back closer to home but still have foreign capital access, Hong Kong is probably the best."
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Written by: Hudson Lockett, Mercedes Ruehl and Louise Lucas
© Financial Times