Alibaba Pictures Group, the film subsidiary of Chinese e-commerce behemoth Alibaba, said Thursday that it would issue new shares to raise $1.6 billion to fund acquisitions and investments.
The company, which is traded on the Hong Kong Stock Exchange, saw its stock price surge more than 100% this spring amid a general rally in Chinese markets and a particular interest in media shares.
But the stock price has recently fallen back. The new 4.2 billion shares represent 20% of Alibaba Pictures' enlarged share base and were sold at a 20% discount; the company now has a market capitalization of approximately $8.8 billion.
In a statement, the company said it intended to use the proceeds of the stock sale for "general working capital purposes" and "to finance potential acquisitions arising out of media related investment opportunities."
However, the company said it has not identified any specific acquisition targets.
Alibaba Pictures was formed in 2014 when Alibaba acquired ChinaVision Media and renamed it. Alibaba Pictures said this week it was buying control of Yueke Software Engineering for $134 million; the company offers ticketing services to 1,500 movie theaters.
Alibaba Pictures said in January that its first production would be "The Ferryman," produced by Hong Kong auteur Wong Kar-Wai, and starring Tony Leung.