Alibaba raised its share buyback programme to $25 billion on Tuesday, the largest ever repurchase plan by the e-commerce giant, to prop up its battered shares as it fights off regulatory scrutiny and concerns about slowing growth.
The plan comes amid a tech stock rally in the past few days after Chinese Vice Premier Liu He said that Beijing will roll out more measures to boost the economy as well as favourable policy steps for capital markets.
This is the second time Alibaba Group Holding Ltd has expanded its buyback programme in a year. It had hiked the programme from $10 to $15 billion last August.
Shares of the company have cratered more than 50% in the past year. “The upsized share buyback underscores our confidence in Alibaba’s long-term, sustainable growth potential and value creation,” Deputy Chief Financial Officer Toby Xu said.
“Alibaba’s stock price does not fairly reflect the company’s value given our robust financial health and expansion plans.”
Alibaba’s shares rose 4.5% in Hong Kong after the news. In the United States, its shares closed down 4.3% on Monday.
Alibaba has been under pressure since late 2020 when Ma publicly criticised China’s regulatory system.
Authorities subsequently halted the planned IPO of its financial arm Ant Group and slapped Alibaba with a record $2.8 billion fine for anti-competitive behaviour, triggering a long slide in its shares.
Growing competition from rivals, slowing consumption, and a maturing e-commerce market have also hit its performance.
In its last earnings release, Alibaba posted a 10% year-on-year revenue growth, its slowest quarter since going public in 2014 and the first time growth fell below 20%.