Alibaba is buying back more and more stock as prices extend selloff

By Tomi Kilgore

Alibaba's quarterly stock repurchases have more than tripled over the past three quarters to $5.8 billion

Shares of Alibaba Group Holding Ltd. rallied Tuesday, after the China-based e-commerce giant disclosed that it continued to increase stock repurchases as prices struggled to gain traction.

The company said before the opening bell that it spent $5.8 billion to buy back the equivalent of 77 million American depositary shares during the three months ended June 30.

That's up from the $4.8 billion spent during the previous three-month period, double the $2.9 billion worth of shares repurchased during the quarter ending Dec. 31 and more than triple the $1.7 billion spent on repurchases during the quarter ending Sept. 30.

Alibaba's U.S.-listed shares (BABA) hiked up 1.9% in afternoon trading. A brief spike up in mid-May saw the stock reach an eight-month high, but it ended June with a quarterly decline of 0.5%.

It had tumbled 17% amid a three-quarter losing streak, before it bounced 2.2% the past two days.

The amount spent and the number of ADS repurchased implies an average buyback price of $75.32 per ADS, which was below the volume-weighted average price for the ADS during the quarter of $76.68, but above where the stock ended the quarter at $72.

The $15.2 billion the company spent on repurchases over the past four quarters represents about 8.8% of the company's current market capitalization of $177.85 billion.

Alibaba said that, as of June 30, there was $26.1 billion remaining in its stock-repurchase program, or roughly 15% of the company's market cap. There were 2.38 billion ADS outstanding as of June 30.

The stock has lost 11.8% over the past 12 months, while the iShares MSCI China ETF MCHI has shed 5% and the S&P 500 index SPX has rallied 23.3%.

-Tomi Kilgore

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07-02-24 1315ET

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