Alibaba Executive Vice Chairman Joseph Tsai an Executive Chairman Jack Ma are re-buying the online retailer’s shares to address the concerns of the investors and other stakeholders
Alibaba Executive Chairman and founder, Jack Ma and Executive Vice Chairman Joseph Tsai are paying $500 million to purchase stock of the Chinese e-commerce company as the Hangzhou based company makes efforts to offset concerns that purchasing on its platforms will be adversely affected as the slowdown of the Chinese economy continues.
The online retailer stated in its regulatory filing that its stock worth $4 billion would be repurchased by it in two years- and that Joseph and Messrs. Mr. Ma intended to purchase the stock of the internet giant as well.
During the third quarter, the enterprise cancelled and repurchase its 40.8 million shares for $274 billion. Purchases of stock worth $500 million were confirmed by Alibaba spokesman. Chinese news website Sina first reported the purchases- but refused to break the purchases between Tsai and Messrs.Ma and Joseph.
Concerns regarding the slowdown of the economy of China and its effects on Chinese buyers have affected the online trading giant. The stock of the electronic trading platform operator, which has declined by over 20% in 2015, closed Friday on the NYSE at a price of $66.91.
Stock was up 4.5% in trading done through midday Monday. The company is also not being able to easily discover ways to accelerate and maintain growth on its marketplaces when it’s already the leading player in the e-commerce industry of China, with four-fifth of the online trading market. The enterprise faces rising rivalry from smaller competitors like JD.com.
The wealth of Jack Ma has also been adversely affected along with the share price of his enterprise. In August, research organization Hurun Report stated the Chinese property tycoon Wang Jianlin had crossed Mr. Jack to turn into the wealthiest person of China.
Still, Mr Jack as well as his family have an estimated net worth of $27 billion in the last year, from a net worth of $25 billion in the past year, Hurun revealed.
In other news, Shanghai daily has reported that an Alibaba- backed private lender stated on 29th February 2016 its focus to provide financial facilities to consumers who aren’t served well has lent billions of dollars to individuals and small enterprises in the previous 8 months.
Through its financial affiliate, Ant Financial Alibaba is holding a 30% share in MYbank. A total of around $6.88 billion( 45 billion yuan) have been lent by MYbank to merchants and farmers on the online marketplace of Alibaba, mom-and-pop stores and owners of restaurants, providing loans to borrowers totaling at 800,000 that haven’t easily been able to access finances from conventional banks.