Alibaba has gained additional holdings.
On January 23rd local time, a 13F document on the website of the US Securities Regulatory Commission showed that Blue Pool, a family fund of Tsai Chongxin, had increased its holdings of Alibaba stocks worth $150 million.
According to sources cited by the New York Times financial column DealBook, Alibaba Group founder Jack Ma also made a significant increase in his holdings of Alibaba stocks during the same period.
The website of the US Securities and Exchange Commission
The news of the core founder's increase in holdings directly drove the stock price, with Alibaba's US stock closing at $74.02/ADS on the same day, up 7.85%. On January 24th, Alibaba's Hong Kong stock closed at HKD 72.6 per share, up 7.32%, with the latest market value of HKD 1.48 trillion.
On the afternoon of January 24th, some media reported that according to sources, Jack Ma and Cai Chongxin jointly hold more shares than SoftBank, and Jack Ma has now replaced SoftBank as the largest shareholder of Alibaba. The International Finance News reporter confirmed this, but Alibaba did not respond as of the time of publication.
Reduce holdings
In 1999, Jack Ma founded Alibaba, and in the same year, Cai Chongxin was recruited as the Chief Financial Officer of Alibaba. Cai Chongxin led Alibaba to the Hong Kong Stock Exchange and the New York Stock Exchange twice in 2007 and 2014, earning him the title of Alibaba's "God of Wealth" and the "man behind Jack Ma.". In September 2023, Zhang Yong, who had served as CEO of Alibaba for eight years and Chairman of the Board for four years, abdicated. Cai Chongxin, who was then the Executive Vice Chairman of the Group, succeeded Zhang Yong as the new Chairman of the Board.
Regarding the recent increase in holdings by Jack Ma and Cai Chongxin, it is widely believed that this move effectively responds to rumors of Jack Ma selling off Alibaba a while ago. Currently, it appears that he is not only "unsold" but also continuously increasing his holdings.
More than two months ago, Jack Ma attracted public attention for cashing out at a key node in Alibaba's spin off. On November 16, 2023, according to 144 documents disclosed on the SEC's official website, Jack Ma's family trust JC Properties Limited and JSP Investment Limited (both British Virgin Islands companies) plan to reduce their holdings of 5 million Alibaba founder shares on November 21, respectively, involving a total stock market value of 870.7 million US dollars (approximately 6.3 billion yuan).
The website of the US Securities and Exchange Commission
The above news directly triggered a major fluctuation in Alibaba's stock price. As of the closing of the US stock market on November 16, 2023, Alibaba's stock price fell by 9.14%, while the Hong Kong stock market continued to plummet at the opening on November 17, with a closing decline of 9.96%.
According to public information, on November 22, 2023, six days after the announcement of Jack Ma's family trust reduction, Alibaba Group Partner and Chief Talent Officer Jiang Fang posted on the Alibaba intranet, stating that, "In order to invest in agricultural technology and public welfare projects both domestically and internationally, Teacher Ma's office signed a reduction contract with a stock broker earlier this year in accordance with SEC 10b5-1 regulations. According to regulations, this conditional future reduction plan will be announced to the public in mid November 2023. The selling price set in August 2023 was much higher than the current stock price, so Teacher Ma did not sell a single share!"
Does Jack Ma's Alibaba stock sell or not? It is currently unknown. The International Financial News reporter noticed that in November 2019, Alibaba returned to the Hong Kong Stock Exchange for listing. The shareholder shareholding structure disclosed in the prospectus showed that SoftBank held 25.8% of the shares, Jack Ma held 6.1%, and Chongxin Cai held 2.0%. Other directors and senior management held a total of 0.9% of the shares, while other public shareholders held 65.2%.
Alibaba prospectus
However, eight months later, in July 2020, Alibaba's financial report announced a new equity structure, and SoftBank remained the largest shareholder with a shareholding ratio of 23.9%, making it the only shareholder with a shareholding ratio greater than 5%. Jack Ma's shareholding ratio dropped to 4.8%. According to public information, as of February 2022, Jack Ma's shareholding has decreased to 4.5%. As his shareholding has dropped to below 5% and he is not a director or executive of the group, Alibaba will no longer disclose Jack Ma's shareholding in its financial reports.
It is worth mentioning that in addition to Jack Ma, SoftBank's shareholding in Alibaba has also gradually declined in recent years. In April 2023, regulatory filings from the US Securities and Exchange Commission showed that SoftBank had sold approximately $7.2 billion (approximately RMB 49.5 billion) worth of Alibaba shares through prepaid forward contracts, which would ultimately reduce SoftBank's stake in Alibaba to only 3.8%. In 2022, SoftBank has reduced its holdings of approximately $29 billion worth of Alibaba stocks through the same method.
Although prepaid forward contracts do not equate to the formal sale of stocks, SoftBank has the option to repurchase these stocks in the future. However, according to Alibaba's financial report, as of July 12, 2023, the largest shareholder SoftBank's shareholding has dropped to 13.9%, compared to 23.9% as of July 15, 2022. This means that within a year, SoftBank's shareholding in Alibaba has decreased by 10%.
Repurchase
While the largest shareholder is reducing their holdings in the company's stock, Alibaba is also conducting a large-scale repurchase to protect the market.
On December 28, 2020, Alibaba's board of directors authorized the repurchase of $10 billion worth of American depositary shares. On August 3, 2021, Alibaba announced the expansion of its share buyback plan from $10 billion to $15 billion. In March 2022, Alibaba announced the continued expansion of its share buyback program, which will expand from $15 billion to $25 billion. The buyback will continue until the end of March 2024, setting a record for the scale of Chinese concept share buybacks.
Eight months later, Alibaba announced once again its existing $25 billion share buyback plan, an additional $15 billion, and an extension of its validity period until the end of March 2025. At this point, Alibaba's share repurchase plan has expanded to $40 billion.
On January 2nd, Alibaba disclosed its share buybacks for the entire year of 2023. According to the announcement, during the 12-month period ending December 31, 2023, Alibaba repurchased a total of 8979 million shares of common stock (equivalent to 112.2 million American depositary shares) for $9.5 billion (approximately RMB 68 billion). As of the end of the fourth quarter of 2023, Alibaba's share repurchase plan still has a repurchase quota of approximately $11.7 billion.
It is worth noting that frequent and large-scale stock repurchases have not supported the continuous rise of Alibaba's stock price. In October 2020, Alibaba's US stock price once reached a high of nearly $320/ADS, with a market value exceeding $800 billion at one point. However, it has been fluctuating and falling since then. In October 2022, it briefly fell below the listing price of $68/ADS. As of now, the value of Alibaba's US stock market has shrunk to less than $200 billion.
Shen Meng, a director of Xiangsong Capital, analyzed and pointed out to the International Financial News that generally speaking, corporate repurchases are aimed at conveying information to the market about the company's stable performance, abundant cash flow, and undervaluation, enhancing investor confidence in the company. However, repurchases are only one of the positive factors, and the stock price is still weak, indicating that repurchases are not enough to alleviate investor concerns.
In fact, many listed technology giants are constantly increasing their investment and repurchasing their own shares. According to Wind data, Tencent repurchased a total of 124 times in 2023, with a total of 148.7 million shares repurchased and a total repurchase amount of HKD 43.985 billion (approximately RMB 40.3 billion). This month alone, Tencent Holdings conducted 13 repurchases, with a total repurchase amount of RMB 8.93 billion.
In November 2023, in the third quarter of 2023 financial report telephone conference, the management of Tencent Holdings said that the valuation of China's Internet stocks had almost reached the lowest point in history, so stock repurchase may be a more favorable means for Tencent's shareholders than other ways.