Alibaba’s $10 bln buyback plan fails to halt share price slide on regulatory concerns
Alibaba shares slumped 9 percent to their lowest since June on Monday, as the firm’s upsized $10 billion buyback program failed to ease concerns about a regulatory crackdown on co-founder Jack Ma’s e-commerce and financial empire.
For all the latest headlines follow our Google News channel online or via the app
A sharp sell-off over two sessions has knocked almost $116 billion off the tech giant’s Hong Kong-listed shares.
The downward spiral intensified when Chinese regulators announced on Thursday the launch of an antitrust investigation into Alibaba and said they would summon its Ant Group affiliate to meet. Alibaba’s US shares sank more than 15 percent during the day.
Read more: Alibaba’s Ma calls trade war ‘stupidest thing in the world’
“The antitrust investigation into Alibaba has yet to specify the penalties, which is worrying investors a lot,” said Zhang Zihua, chief investment officer of Beijing Yunyi Asset, adding a probe outcome could “greatly change” the company valuations.
Putting investors more on edge was news over the weekend that China’s central bank had asked Ant to shake up its lending and other consumer finance operations.
These developments are part of a crackdown on monopolistic behavior in China’s booming internet space in general, but Ma’s business empire in particular after he publicly criticized the regulatory system for stifling innovation.
Last month, Chinese regulators abruptly suspended Ant’s blockbuster $37 billion initial public offering in Shanghai and Hong Kong, which was on track to be the world’s largest, just two days before its planned debut.
“The new regulations are hurting big internet platforms, so you see Tencent and other tech companies are also seeing their share prices going down,” said Li Chengdong, a Beijing-based tech analyst.
“Alibaba now is the target of the regulators so the reaction is stronger.”
Regulators have warned Alibaba about the so-called “choosing one from two” practice under which merchants are forced to sign exclusive cooperation pacts preventing them from offering products on rival platforms.
The State Administration for Market Regulation said on Thursday that it had launched a probe into the practice.
The gloom due to the regulatory crackdown overshadowed Alibaba’s decision, announced on Sunday, to raise its share repurchase program to $10 billion from $6 billion, effective for a two-year period through the end of 2022.
Alibaba shares could trade lower in the near term due to the “regulatory overhang”, Nomura said in a note on Monday.
But the cheaper value will be attractive for long-term investors, Nomura added as it kept a “buy” rating on Alibaba’s US listed stock and retained a target price of $361. The stock closed at $222 on Thursday.
-
China steps up regulatory pressure on Alibaba with anti-monopoly probe
Chinese regulators on Thursday announced an anti-monopoly investigation of e-commerce giant Alibaba Group, stepping up the ruling Communist Party’s ... Technology -
Alibaba facial recognition tech picks out China’s Uighur minority, says report
Technology giant Alibaba Group Holding Ltd has facial recognition technology which can specifically pick out members of China’s Uighur minority, ... World News -
Alibaba’s Jack Ma donates coronavirus kits to US, Europe, Africa
Chinese billionaire and co-founder of Alibaba, Jack Ma is donating millions of coronavirus test kits and face masks to the US, Europe and Africa. The ... Economy -
E-commerce giant Alibaba raises $11 billion in share listing
The Chinese e-commerce giant Alibaba has raised at least $11 billion in a share offering in Hong Kong, netting the city’s biggest offering since ... Economy -
Stocks cheer warming trade talks, Alibaba’s strong HK debut
Asian stocks rose on Tuesday, bolstered by new momentum in Sino-US efforts to end their acrimonious trade dispute and as Chinese e-commerce giant ... Financial Markets -
Alibaba Singles’ Day smashes $25 bln sales record
Chinese e-commerce giant Alibaba Group Holding Ltd smashed the 2017 record for its Singles’ Day sales event on Sunday, surpassing 168 billion ... Economy -
Alibaba cuts sales forecast on economic uncertainty, trade fears
China’s Alibaba Group Holding Ltd lowered its full-year sales forecast on Friday due to concerns about the economic impact of a US-China trade ... Economy -
Alibaba’s Ma calls trade war ‘stupidest thing in the world’
The US-China trade war is the “stupidest thing in the world,” Alibaba e-commerce tycoon Jack Ma declared at an import fair that China ... Economy