Technology
Wednesday, November 22nd, 2023 3:17 pm EDT
Key Points
- Jack Ma Delays Stake Trim: Jack Ma, the founder of Alibaba, has decided to postpone plans to reduce his stake in the Chinese e-commerce giant. Despite earlier intentions to sell 10 million shares valued at approximately $870 million, Alibaba’s Chief People Officer, Jane Jiang, revealed in an internal memo that Ma has not sold any shares. The decision is attributed to Alibaba’s stock trading below the company’s perceived value.
- Regulatory Filings and Market Impact: Alibaba’s regulatory filings last week disclosed Jack Ma’s plan to sell shares, which coincided with the release of the company’s September quarter earnings. The revelation led to a decline in Alibaba’s stock by around 9%. The planned sale of 10 million shares was initially formulated in August, with the intention to capitalize on higher stock prices. Alibaba’s U.S.-listed shares were trading at $101 in August, but as of the recent closing, they were at $78.94.
- Confidence in Business and Beijing’s Impact: Despite the challenges and regulatory scrutiny faced by Alibaba and its founder, Jack Ma, his decision to wait for a higher selling price is interpreted as a sign of confidence in Alibaba’s business. Jack Ma and his business empire have been targeted in the broader Chinese government crackdown on the technology sector. As a response, Ma has shifted his focus to teaching and research, particularly in areas such as agricultural science. Alibaba has also undergone significant changes in 2023, including restructuring into six business groups and a change in CEO.
Jack Ma, the founder of Alibaba, has postponed plans to reduce his stake in the e-commerce giant despite previous intentions to sell 10 million shares valued at around $870 million. The decision comes as Alibaba’s stock currently trades below its actual value, according to Alibaba’s Chief People Officer, Jane Jiang. The announcement of Ma’s plans coincided with Alibaba’s decision to abandon the spinoff of its cloud computing business, resulting in a 9% drop in shares. However, Jiang clarified that Ma’s decision was made in August when Alibaba’s U.S.-listed shares were trading higher at around $101. The current closing price of $78.94 would result in a net gain of approximately $789.4 million if Ma were to proceed with the sale. Jiang emphasized that Ma’s willingness to wait for a higher selling price reflects his confidence in Alibaba’s business. The company has undergone significant changes in 2023, including restructuring into six business groups and a change in CEO. Jack Ma and his business empire have been targeted in the broader Chinese government crackdown on the technology sector, prompting Ma to focus on teaching and research, particularly in agricultural science.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/11/22/jack-ma-halts-plans-to-cut-his-alibaba-baba-stake-after-shares-drop.html
