Alibaba Executives BuyBack Shares

To boost the confidence of the investors the Chinese internet giant's co founder and deputy will be buying stock from their own spending

On Monday, the Chinese e-commerce giant; Alibaba Group Holding Ltd. announced, as reported by Sina News and confirmed by an unnamed Alibaba’s spokesman, that two of its executives; Chairman Jack Ma and Vice Chairman Joseph Tsai will be spending out of their own pockets a sum of $500 million in order to contribute to the buyback of the company stock. The proposed buyout intends to boost the confidence of the investors in the company which has been slumped down due to the prevalent slowing economic environment.

Last year, in August, through a regulatory filing the Hangzhou, China based firm had disclosed that it has planned to repurchase shares worth $4 billion. The span of the buyback was expected to spread over for two years. The company highlighted that the Chinese billionaire and co-founder Jack Ma and his deputy Joseph Tsai would contribute personally in the buyback program of the company however the extent of their spending was not disclosed. The filing also said that during the September 30, 2015 quarter ended the company had canceled and repurchased $2.74 billion worth shares which totaled to be 40.8 million in number. The segregated amounts for the purchase made by both the executives have not been revealed by the company.

The recent economic crux has slumped down almost every industry and naturally the Chinese internet giant couldn’t immune itself from the decelerating economy. The slow growth substantially tarnished the consumers purchasing power which collaterally weighed down on the company’s stock. The stock fell down by 20% in the foregoing year from its price of $68 as introduced in its Initial Public Offering (IPO).

Moreover, the company has been under a lot of external pressure which includes dynamic competition, price cuts, and lawsuits and litigations. Recently, the Chinese giant has been under a lot of criticism when it couldn’t hold the sale of counterfeited goods from its platform. Therefore, to come out clean as strong, the company has a lot of hard work to put in. Smaller rivals like JD.com Inc. are also posing great threats to the company. As of now, Alibaba Group successfully holds 80% market share of the e-commerce sector.

Furthermore, the unwanted slumped in the stock has also impacted Jack Ma’s personal worth. According to a study formulated by a research firm, Hurun Report, in August, Mr. Ma has been taken over by Chinese property developer Wang Jianlin to become the China’s richest person. However, as of 2015, Mr. Ma and his family still has an estimated worth of $27 billion which has gone up from $25 billion.

At the market which closed on Monday, Alibaba Group Holding Ltd. stock closed at $66.91.