- Alibaba said Tuesday it will increase its share buyback program to $25 billion, from $15 billion in August.
- It's the largest buyback plan ever from the Chinese e-commerce giant and will run until March 2024.
- Alibaba shares in Hong Kong closed 11% higher, and the US-listed stock rise as much as 11% in the pre-market.
Alibaba stock soared as much as 11% in Tuesday's pre-market session, after it announced its biggest ever share buyback program of $25 billion.
This is the Chinese e-commerce company's largest ever share buyback plan and will be valid for two years until March 2024. The company had previously raised its buyback program to $15 billion last year in August, up from $10 billion.
Alibaba said it repurchased about $9.2 billion in American Depositary Receipts, about 56.2 million in total, as of March 18 2022, through its previous buyback program.
"The upsized share buyback underscores our confidence in Alibaba's long-term, sustainable growth potential and value creation," Alibaba Deputy Chief Financial Officer Toby Xu said, according to Alibaba's corporate news website.
The company raised its share buyback programme as a sign of confidence in its future growth despite the pandemic, according to the website.
The company's shares closed up 11.20% in Hong Kong on Tuesday and were last trading up 8.7% at around $112.66 at 06:35 a.m. ET. Its share are still down around 50% over the last 12 months.
"Alibaba's stock price does not fairly reflect the company's value given our robust financial health and expansion plans," the Deputy CFO said.
The buyback program follows a rally in Chinese and Hong Kong stocks last week after Beijing promised to keep capital markets stable and said it supported foreign listings.
Chinese Vice Premier Liu He pledged policies to boost financial markets and encourage economic growth, following a drop in stocks.
"All policies that have a significant impact on capital markets should be coordinated with financial management departments in advance to maintain the stability and consistency of policy expectations," he said last Wednesday.
Shares in Alibaba rose by almost 30% in a day following the announcement.