Alibaba Reduces Shares and Sees Stock Surge

Investing.com — Alibaba (NYSE:BABA) purchased back 414 million ordinary shares, equivalent to 52 million American depositary shares (ADSs), during the quarter ending September 30, at a total cost of $4.1 billion, according to a regulatory filing released on Wednesday.

The Chinese internet giant indicated that these buybacks took place in both the U.S. and Hong Kong markets as part of its share repurchase program.

By September 30, Alibaba had 18,620 million ordinary shares outstanding, which translates to 2,327 million ADSs. This signifies a net reduction of 405 million ordinary shares since June 30, marking a 2.1% decrease, after considering shares issued through its employee stock ownership plan (ESOP).

As of September 30, Alibaba had $22 billion left in its buyback program.

BABA, along with other Chinese tech stocks, experienced a notable rally over the past week, reaching their highest levels in over a year following new stimulus measures introduced by China’s central bank to enhance the economy.

Last Thursday, Alibaba’s U.S.-listed shares closed above $100 for the first time since August of last year. The stock maintained its upward trend, climbing over 20% in the last five trading days.

In Hong Kong, Chinese stocks surged sharply on Wednesday, achieving their most significant gain in nearly two years, fueled by optimism surrounding new stimulus initiatives.

The Hang Seng China Enterprise (CEI) Index jumped 7.1%, marking its 13th consecutive day of increases, with property developers and brokerage firms at the forefront. Property stocks surged by 47%, while brokerage shares increased by 35%, both reaching record intraday highs.

This rally followed a series of government measures aimed at boosting China’s economy, including interest rate cuts, increased liquidity for banks, and support for stocks. Additionally, four major cities relaxed home-buying restrictions, and the central bank decreased mortgage rates. Mainland markets are closed until October 8 for a holiday.