(Bloomberg) – Alibaba Group Holding Ltd. posted its highest gain in six months after revealing that co-founders Jack Ma and Joseph Tsai bought about $200 million in the company's shares, giving investors a positive signal as Chinese stocks weather a market slump.
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China's e-commerce pioneer rose 8% after The New York Times reported that Ma, the once outspoken billionaire who withdrew from the public eye after Beijing's crackdown on his empire in 2020, sold shares worth about Bought for $50 million. His longtime confidant Tsai, now the company's chairman, purchased about $150 million worth of shares through his family's investment vehicle, according to a securities filing.
The revelation came as investors grappled with doubts about China's post-coronavirus turnaround and a market slump that has hit swaths of the world's second-largest economy. Alibaba had lost more than 40% of its value last year as the company that once defined Chinese e-commerce lost market share to rivals such as PDD Holdings Inc. and underwent a management reshuffle. The rally coincided with a 5 percent rise in the Nasdaq Golden Dragon China index of U.S.-listed Chinese stocks after Bloomberg reported that Beijing is preparing a $278 billion market rescue package.
Alibaba's problems, as well as the surprise departure of former CEO Daniel Zhang, led to speculation that Ma himself might take a more direct stake in his company. The co-founder has stepped up his public engagement in recent months, although it's still a far cry from the days when he was a regular at global conferences.
Arguably China's most famous entrepreneur, Ma, broke years of silence in November and called on employees to take up arms. He called on Alibaba to “correct its course” in an internal forum and praised PDD, which has gained market share with its successful shopping app Temu. Ma said Alibaba can be successful again with determination and hard work.
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It is unclear whether Ma's move represents a reversal of his longstanding stance, which has been to gradually sell his stake in the company and instead focus on his own projects. He announced plans on Nov. 21 to sell off 10 million shares worth about $870 million, according to filings last year.
But it comes at a critical time for a company that once surpassed China and was among the world's largest by market value.
Tsai and new CEO Eddie Wu are seeking to rejuvenate Alibaba after a series of missteps and regulatory scrutiny eroded the company's dominance. The Chinese corporate icon, which has suffered from fluctuations in consumption and years of government crackdown after the Corona crisis, now has to contend with the rise of competitors such as PDD and ByteDance Ltd. deal with.
Last year, the company unveiled a plan to split into six parts – and then reversed that plan by scrapping Zhang. It scrapped a spinoff of its $11 billion cloud division sought by some investors, saying the company needed a “reboot.”
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Ma and Tsai both bought up Alibaba shares in recent months as the stock plunged, The New York Times reported, citing unidentified people familiar with the matter.
Tsai's Blue Pool Management bought nearly 2 million of Alibaba's U.S.-traded shares in the fourth quarter, worth about $152 million, the filing said. It was the first time Tsai's fund bought Alibaba shares since at least the last quarter of 2017, according to a review of regulatory filings.
Ma, who left his role as chief executive in 2019 but is still a major shareholder, bought $50 million worth of shares in the quarter, the Times reported, citing a person familiar with the matter.
– With support from Antonia Mufarech, Brian Chapatta and Vlad Savov.
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