October 7, 2022

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Alibaba raises share buybacks from $15 billion to $25 billion

Alibaba raises share buybacks from $15 billion to $25 billion

A man walks past the Alibaba Group logo at its office building in Beijing, China, August 9, 2021. REUTERS/Tingshu Wang

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(Reuters) – Alibaba Group Holdings Ltd. raised its share buyback program to $25 billion on Tuesday, its second increase in less than a year, to support stocks hit by fears of slowing growth.

The announcement marks an increase from its previous plan to buy back $15 billion in shares, and represents the largest share buyback since it went public in 2014.

Its shares rose 4.5% in Hong Kong (9988.HK) after the announcement.

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Alibaba said it had already repurchased about $9.2 billion of its US-listed shares as of March 18 under its program, which was initially scheduled to run through the end of this year.

The company’s shares plunged in December 2020 after a previous $10 billion buyback failed to ease concerns about a regulatory crackdown on e-commerce and co-founder Jack Ma’s financial empire. Read more

Alibaba continued to increase buybacks to $15 billion last August. (https://bit.ly/36aOVsd)

The current program will be valid for two years until March 2024.

“The amplified stock buyback underscores our confidence in Alibaba’s long-term sustainable growth potential and value creation,” said Toby Xu, deputy chief financial officer of Alibaba Group.

“Alibaba’s share price does not fairly reflect the value of the company in light of our aggressive financial and expansion plans.”

Alibaba’s Hong Kong-listed shares have lost nearly 57% of their value since the beginning of last year to March 21.

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The company has been under pressure since late 2020 when Ma publicly criticized the Chinese regulatory system.

Authorities then halted the planned initial public offering of Ant Group, Alibaba’s financial arm, and subsequently imposed a record $2.8 billion fine on the company for its anti-competitive behaviour.

The recent buyback plan comes amid a rally in stocks in the past few days after Chinese Vice Premier Liu He said Beijing will implement more measures to boost the economy as well as favorable policy steps for capital markets. Read more

Alibaba has also appointed Weijian Shan, CEO of PAG Investment Group, as an independent director of its board of directors, said Borg Ekholm, CEO of Ericsson. (ERICb.ST)He will retire from Alibaba’s board of directors on March 31.

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Additional reporting by Shubham Kalia in Bengaluru and Josh Horowitz in Shanghai; Editing by Sherry Jacob Phillips and Himani Sarkar

Our criteria: Thomson Reuters Trust Principles.