China's most famous entrepreneur, Jack Ma, has retreated into the shadows after a conflict with the authorities, but he is gradually buying up shares of his company Alibaba, believing that it has potential. The New York Times writes about this.
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Ma like would give up his business
Jack Ma, who disappeared from public view after criticizing the Chinese authorities, seemed to walk away from his business, also giving up control of Ant Group, a subsidiary of Alibaba. Earlier, the Ministry of Finance wrote that Ma had opened a new food production company.
However, in recent months he has been buying shares in Alibaba, as has Joseph Tsai, Ma's longtime business partner and head of the company.
Tsai and Ma have not advertised the share buyback. At the same time, this suggests that businessmen believe that their company is undervalued after its shares have fallen significantly. Alibaba's share price on the Hong Kong stock exchange has dropped by almost 35% over the year. On the New York Stock Exchange, the price of securities fell by 33% per year.
Alibaba share price dynamics on the Hong Kong stock exchange/Source: Google
How many shares were repurchased
According to The New York Times, on January 23, Tsai acquired US-traded shares of Alibaba worth about $151 million through his family investment company Blue Pool Management.
Ma, who retired as the company's chief executive in 2019 but remains a major shareholder, bought $50 million worth of shares on the Hong Kong stock exchange this quarter.
Ma and Tsai already own large amounts of Alibaba shares.
The size of the purchase is not large – Alibaba's market capitalization is about $171 billion, but such a repurchase of shares of their company may indicate growth potential, since Ma and Tsai know exactly how the fintech giant will develop. Therefore, such buybacks are closely monitored by both regulators and investors.
Alibaba itself last year bought back 3% of its shares for $9.5 billion.
< p>Alibaba has gone through difficult times in recent years. It is one of the first to be hit by the tech industry's downturn, which has wiped out about $1.1 trillion in the sector's market capitalization.
In 2020, Ant Group was forced to cancel its potentially record-breaking IPO under pressure from Chinese authorities. Chinese officials later imposed an antitrust fine on Alibaba in the amount of $2.8 billion.