On December 16th, Red Star Capital Bureau reported that on December 15th local time, according to documents from the US Securities and Exchange Commission, Taobao China Holding Limited, a subsidiary of Alibaba, plans to sell 25 million shares of Xiaopeng Motors (09868. HK/XPEV. US) ADR (American Depositary Shares) with a total value of approximately $391 million. The sale date is around December 15th.
Affected by this news, the US stock market of Xiaopeng Motors closed down 7.5% at $14.47, with a total market value of $13.641 billion.
The announcement shows that the securities to be sold were purchased as pre IPO investments on September 12, 2019. According to the prospectus of Xiaopeng Motors in Hong Kong, Taobao China holds 11.9% of the shares, making it the second largest shareholder of Xiaopeng Motors.
The relevant person in charge of Alibaba Group stated, "We have sold some of our shares in Xiaopeng based on our capital management goals, reducing our shareholding from 10.2% to 7.5%. Xiaopeng is one of the leaders in China's electric vehicle industry, and we have established a strategic partnership with it. We believe in Xiaopeng's prospects and look forward to continued cooperation with the company."
In response to Alibaba's partial reduction of equity in Xiaopeng Motors, Xiaopeng Motors responded to the Red Star Capital Bureau that Alibaba's reduction was a strategy of implementing its Q3 quarterly report's external communication on investment realization and return to shareholders, rather than due to a change in views on Xiaopeng Motors. Alibaba will continue to be the second largest shareholder of Xiaopeng, holding approximately 8% of the shares, and will continue to engage in deep strategic cooperation with Xiaopeng Motors in areas such as cloud computing.
In addition, Xiaopeng Automobile emphasized that it has established a strategic cooperation with Volkswagen Group this year, and Volkswagen is currently Xiaopeng's third largest shareholder. Xiaopeng currently has over 40 billion yuan in cash on hand, with a positive free cash flow of several billion yuan in the second half of the year, indicating abundant cash and a significant improvement in cash flow.