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 gained 4.5 per cent in early trading on Tuesday in Hong Kong after the buy-back plan was announced.
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The buy-back, however, has not stopped its share price from falling, which is down 16.6 per cent since the start of the year and is currently at one-third of its peak in October 2020.
“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.”
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The buy-back comes just after Beijing showed a rare signal that it might lift its crackdown on Big Tech slightly. The stock market rebounded last Wednesday after two days of steep declines, when Vice-Premier Liu He urged regulators to give a heads-up to financial authorities before any new policies were published.
Separately, Alibaba has appointed Shan Weijian, executive chairman of investment group PAG, as an independent director to the company’s board. He will replace Borje Ekholm, the CEO of Ericsson, who has been an independent director since 2015.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice…