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Alibaba’s Share Price Rose as the Company Declares Plans for Shares Buyback

Industry: E-Commerce
Current: Company Performance

Alibaba registered lesser-than-expected revenue growth in the recent quarter’s financial results and registered a net loss of $3.16 billion
Alibaba intends to increase its share buyback program by $15 billion from the initially planned $25 billion program by 2025
Alibaba's stock price has risen because of the new share buyback strategy

China’s Zero Covid Policy Resulted in Alibaba’s Logistics Disruption and Hindered Consumer Spending

Chinese e-commerce giant Alibaba Group Holding registered a quarterly revenue of $29.12 billion in the third quarter of 2022 ending September. Alibaba’s revenue is slightly below expectations as compared to the growth anticipated by the company. The COVID-19 restrictions by Chinese authorities as a part of the zero-covid policy resulted in slowing down Alibaba’s logistics and revenue growth.

Alibaba Announced a Loss of $3.16 billion in the Recent Quarterly Results

Alibaba lost $3.16 billion for three months that ended September, versus expectations for a profit of nearly the same amount, after marking down the value of investments ranging from Didi Global Inc. to Indonesia's GoTo.

Alibaba Extended Share Buy Back Program by $15 billion

With the slowed revenue growth registered in the latest quarter, Alibaba is considering buying back its shares. Alibaba’s shares buy-back strategy has resulted in lifting the company’s stock price. Under its existing US$25 billion share repurchase program, Alibaba repurchased approximately US$18 billion of its shares. Furthermore, its board of directors has agreed to increase the share repurchase program by another $15 billion and extend it until the end of the fiscal year 2025. The buyback strategy resulted in increasing the company’s share prices.

Furthermore, Chinese authorities have established 20 new guidelines to ease out covid zero policy, which is expected to positively impact the company’s sales.

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