Alibaba expands share buy-back to a record US$25 billion amid stock price slump
- The share buy-back programme will run for two years through March 2024
- Shan Weijian, executive chairman of PAG, replaces Ericsson CEO Borje Ekholm as independent director on the company’s board
Alibaba Group Holding, the Hangzhou-based e-commerce giant, upsized its share buy-back programme from US$15 billion to US$25 billion on Tuesday amid a plunge in its stock price. It is the largest buy-back in the tech giant’s history.
The programme will run for two years through March 2024, the company said in a statement. Alibaba, which owns the South China Morning Post, had announced a US$10 billion share buy-back plan in December 2020 and expanded it to US$15 billion in August last year.
Alibaba said that as of March 18 it has spent about US$9.2 billion on its buy-back plans. However, until now they have not stopped its share price from falling. Before the buy-back plan was announced on Tuesday, the stock was trading at about one-third of its peak in October 2020.
Alibaba’s Hong Kong listed shares rose 11.2 percent to close at HK$110.20 (US$14).
“The upsized share buy-back underscores our confidence in Alibaba’s long-term, sustainable growth potential and value creation,” said Toby Xu, Alibaba’s deputy chief financial officer. “Alibaba’s stock price does not fairly reflect the company’s value given our robust financial health and expansion plans.”