Alibaba, founder Jack Ma, and vice chairman Joseph Tsai will repurchase $500 million shares of the company.
Alibaba Group Holding, its founder and executive chairman Jack Ma, and executive vice chairman Joseph Tsai are planning to spend a hefty amount to buy company’s share back in the coming days. The Wall Street Journal suggests that they will be spending nearly $500 million in order to repurchase its stocks. The only purpose to do this is to rule out concerns, which states that the online shopping platform would massively decrease its online marketplaces as the economy of the country takes a hit in the near future.
Alibaba Group previously announced in a regulatory filing that it is set to buy back as much as $4 billion worth of its shares of the last two years. Furthermore, the company also announced in its regulatory filing that Joseph Tsai and Ma would buy Alibaba’s stock. Previously, the Chinese tech giant bought back nearly 40.8 million of its shares, which were valued at $2.74 billion and canceled it later.
The economy of China is growing at its slowest pace since 2009 and this has had an impact on not only the e-commerce industry but also the overall business sector of all fields. Online marketplaces were said to be the most affected by the slowed economy. Analysts and experts, along with the company officials, were concerned about how the industry will shape up until this is resolved. Jack Ma did not let panic or anxiety surface on his face at all. His facial expressions were calm when he assured that Alibaba’s business would grow regardless of the conditions.
It is to be considered that Alibaba now faces tough competition from its domestic rival JD.com. Despite of being the biggest online retailer in the region, somehow JD.com is outclassing the Chinese e-commerce giant. It is growing faster in the region than Alibaba’s online marketplaces.
The spokesman of the online retailer confirmed the news on Monday that the firm has repurchased $500 million in stock. The news was first reported by a well-reputed news site Sina but refused to make the purchases public that were made between Alibaba, Jack Ma, and Tsai.
The fact which is constantly nagging the Alibaba is China’s slow economy and its impact on the Chinese consumers who are now more reliant on the digital world i.e. online shopping, online food, and online everything etc.
Alibaba do have a backup plan to implement when this thing actually starts to hit the company right where it hurts. So far, the stock of the company has fallen down by more than 20% since last year. Also, the shares were priced at $66.91 when the New York Stock Exchange closed on Friday. Shares jumped 4.5% on Monday.
The e-commerce organization currently accounts for nearly 80% of the market share and it is already the dominant force in the region. Still it is finding it difficult to maintain as well as accelerate growth on its online marketplaces.
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