In the recent quarter ending March, Alibaba Group (9988.HK) executed a significant share repurchase, acquiring $4.8 billion worth of its shares.
This move comes as part of an ambitious attempt to bolster investor confidence amidst challenges to its growth, marking it as one of the company’s largest buybacks.
The decision to augment the buyback plan by an additional $25 billion in February was largely influenced by Alibaba’s desire to reassure stakeholders concerned about the company’s future in a competitive marketplace, notably against emerging rivals like PDD (PDD.O).
This latest buyback exceeded the $2.9 billion worth of shares Alibaba repurchased in the preceding quarter.
Despite these efforts, Alibaba’s stock, which trades in both Hong Kong and the U.S., has seen a decline of over 6% in value this year.
This downturn reflects growing investor apprehension regarding Alibaba’s dropping earnings, reduced spending per user, and the broader downturn in Chinese consumer spending.
These trends have seen Alibaba, once a dominant force in the internet sector, lose ground to competitors including PDD and ByteDance, the parent company of TikTok.
Adding to its challenges, Alibaba reported a sharp decrease in net income to ordinary shareholders in its third-quarter financials, posting a figure of 14.4 billion yuan ($1.99 billion), which represents a 77% fall.
This significant downturn was attributed to impairments in its investments, particularly in Sun Art, a hypermarket operator, and Youku, an online video streaming service.
In a strategic pivot, Alibaba is currently undergoing a major organizational reshuffle.
This includes splitting into six distinct units and appointing a new chief executive.
This restructuring follows the abandonment of plans to list its cloud and logistics divisions, signaling a refocused commitment to its core e-commerce and digital service operations.
This shift aims to streamline Alibaba’s business model, allowing for greater agility and responsiveness to market dynamics and competitive pressures.