Alibaba expands share buyback size to record $25B

On Tuesday, Alibaba Group Holding Limited raised its share buyback program from $15.00 billion to $25.00 billion. The scheme will be effective for two years through March 2024.

This latest move was the largest ever repurchase plan by the e-commerce giant.

It intends to prop up the firm’s battered shares as it fights regulatory scrutiny and concerns about slowing growth.

Alibaba aims to boost investor confidence as its stock price has lost around two-thirds of its value since 2020.

It is the second time that the company has expanded its buyback program in a year. Last August, it had hiked the repurchasing plan from $10.00 billion to $15.00 billion.

Previously, Alibaba has bought back about 56.20 million American depositary shares (ADRs), worth $9.20 billion.

Moreover, the plan comes amid the recent technology stocks rally. The upturn came after Chinese Vice Premier Liu He stated they would roll out more measures to boost the economy.

Nevertheless, the business grappled with multiple headwinds as it has been under pressure since late 2020.

It started when its billionaire founder, Jack Ma, publicly criticized China’s regulatory system.

Eventually, the local government authorities slapped the company with a $2.80 billion antitrust fine last year.

Regulatory officials also halted the planned blockbuster IPO of its financial arm Ant Group, triggering a slide in its shares.

At the same time, growing competition from rivals and a maturing e-commerce market have also hit its performance.

In addition, China introduced sweeping new rules across the technology industry over the past 14 months.

This move has shaken investors’ confidence and wiped billions of dollars of value off the state’s publicly-listed heavyweights.

Analysts noted that Alibaba’s buyback decision makes sense given how Beijing’s measures are against monopolistic behavior.

Alibaba shares surge on its share buyback plan

The announcement sent the stock to an upturn of 11.20% or 1.42 points to $14.08 per share.

Regardless, Alibaba Group prepares to lay off more than 15.00% of its total workforce due to China’s regulatory crackdown.

Moreover, it posted a 10.00% year-on-year revenue growth in its last earnings release. This result is the slowest quarter since going public in 2014, and the first time growth fell below 20.00%.

Meanwhile, Alibaba appointed Weijian Shan as an independent director to its board. This executive position change will be effective on March 31.

Shan will work on the board’s audit committee. He will replace Börje Ekholm, executive officer of the telecommunications giant Ericsson, who will retire from Alibaba’s board.