New investors of financial services provider Reorient Group Ltd. (00376.HK) earned billions of Hong Kong dollars on paper after the stock resumed trading following a private placement on Monday, the Hong Kong Economic Journal reported Tuesday.
Among the investors was Jack Ma, chairman of e-commerce giant Alibaba Group Holding Ltd. who made a paper profit of HK$5.52 billion from his investment through a 40 percent holding in Yunfeng Financial Holdings Ltd.
Yunfeng Financial controls Jade Passion Ltd., which agreed to buy 1.34 billion new shares in Reorient, or 56 percent of its enlarged capital, for HK$2.68 billion, or HK$2 each.
Reorient shares surged 152 percent to close at HK$22.65 on Monday.
Yu Feng, Ma’s partner in Yunfeng, booked a gain of HK$8.28 billion from the investment, the report said.
Ma’s partner in Jade Passion, Huang Youlong, earned HK$7.43 billion on paper. Huang is the husband of Chinese actress Zhao Wei and an investor in Alibaba Pictures Group Ltd. (01060.HK), Alibaba Group’s entertainment arm.
Francis Kwok Sze-Chi, executive director of Bright Smart Securities, said the jump in Reorient’s stock price was not backed by fundamentals as the company has yet to define its actual business.
Translation by Vey Wong
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