Alibaba's Bold Actions - $4.8B Stock Repurchase and Revolutionary One-Hour Global Delivery Plan

Alibaba Group Holding Ltd. Sponsored ADR +0.28%
CoreValues Alpha Greater China Growth ETF -1.54%
Golden Dragon China Powershares -0.84%

Alibaba Group Holding Ltd. Sponsored ADR

BABA

69.07

+0.28%

CoreValues Alpha Greater China Growth ETF

CGRO

19.34

-1.54%

Golden Dragon China Powershares

PGJ

23.54

-0.84%

Alibaba Group Holding Ltd (NYSE:BABA) has aggressively accelerated its share buy-back program, purchasing $4.8 billion in Hong Kong and New York last quarter. 

The buy-back represents the company’s most substantial buy-back effort since 2021, during which its stock faced downward pressure due to concerns about its competitive position and earnings outlook. 

The repurchase involved 524 million ordinary shares, equating to 65 million American depositary shares (ADS), up from the $1.9 billion spent in the same quarter of the previous year and $2.9 billion in the last quarter of 2023. 

The buy-back reduced the company’s share capital by 5.1%, surpassing its annual minimum target of 3%, SCMP reports.

Also Read: Alibaba Cloud’s Livestream Event Draws Millions, Sparks Cloud Computing Price War

Over the fiscal year ending March 31, Alibaba allocated $12.5 billion to its share repurchase program, up from $10.8 billion the year before, as detailed in a stock exchange filing. 

By the end of December, the company had nearly $92 billion in cash and equivalents. 

Meanwhile, Alibaba is embarking on an ambitious project with Space Epoch, a domestic rocket developer, aiming to deliver packages globally within an hour. 

This futuristic delivery method will utilize a reusable rocket, XZY-1, capable of sea landings, as announced by Space Epoch. 

The collaboration will commence soon and will leverage a rocket offering 120 square meters of cargo space. 

It can transport up to 10 tonnes, enabling it to carry large items such as cars or small lorries, SCMP reports.

In addition to this venture, Alibaba has been advancing its logistics capabilities to compete domestically and internationally.

Recently, it expanded its “five-day delivery” service to the United States through its AliExpress platform, facilitated by its logistics arm, Cainiao Smart Logistics Network. 

Cainiao has broadened this service to several other countries and plans to increase its employees’ year-end bonuses to boost morale following the cancellation of its IPO.

Analysts continue to note Alibaba as an attractive turnaround story, seeking more signs of macroeconomic recovery in China.

The stock lost 26% in the last 12 months. Investors can gain exposure to the stock via Invesco Golden Dragon China ETF (NASDAQ:PGJ) and Tidal Trust II CoreValues Alpha Greater China Growth ETF (NYSE:CGRO).

Price Action: BABA shares traded lower by 0.95% at $72.19 premarket on the last check Wednesday.

Also Read: Alibaba’s Logistics Arm Cainiao Boosts Employee Bonuses, Plans Major Incentive Overhaul

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo by chrisdorney via Shutterstock

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