FAST NEWS:  Alibaba continues aggressive share buyback

The Latest: E-commerce giant Alibaba Group Holding Ltd. (BABA.US; 9988.HK) said it spent $4.8 billion in the first quarter of this year to repurchase its American depositary shares (ADS) under its ongoing buyback program.

Looking Up: The company expanded its share repurchase program in March 2022 from $15 billion to $25 billion, reflecting its strong cash flow generation. It bought back just over 1 billion ordinary shares in its just-ended fiscal year through March 31, resulting in a 5.1% reduction of its total shares outstanding over that time.

Take Note: Alibaba’s shares have been under pressure since early 2021 after the Chinese government suspended a planned IPO for its Ant Group financial affiliate, and later fined it a record $2.8 billion for anti-competitive practices.

Digging Deeper: Alibaba was once an investor favorite due to its position as China’s top e-commerce company. It listed in New York in 2014 at $68 per American depositary share (ADS), and the stock soared as high as $300 in 2020. But the stock has been under pressure since then due to the government clampdowns and stiff competition. A year ago, the company announced a plan to break itself up into six business units that would each operate independently. But it later scrapped parts of that plan, including its latest decision to call off a listing for its Cainiao logistics unit, citing unfavourable market conditions.

Market Reaction: Alibaba’s stock moved slightly lower on Wednesday and closed down 0.2% at HK$70.85 by the midday break in Hong Kong. The stock is down about 30% from its 52-week high.

Writing by Doug Young

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