- Chairman, vice chairman using own money to fund the deal
- Company first announced $4 billion buyback program in August
Alibaba Group Holding Ltd. was joined by Chairman Jack Ma and Vice Chairman Joseph Tsaiin a $500 million share purchase after a slump in the Chinese e-commerce operator’s stock price.
The billionaire co-founder and his lieutenant will use their own money to buy stock, Alibaba said in a statement Monday. The company first announced in August Ma and Tsai would contribute to its $4 billion stock purchase program without specifying how much they would spend.
Alibaba is trading below its initial public offering price of $68 after plunging 20 percent in the past year as it grapples with slowing growth, the result of its reliance on a decelerating Chinese economy. It’s getting squeezed by price cuts and competition in bigger cities, while facing lawsuits amid challenges in dealing with counterfeits.
As China’s largest online emporium, Alibaba is the standard-bearer for an economy that’s navigating a bumpy transition from a high-speed export economy to one anchored by consumer spending. The broader deceleration and Alibaba’s own scale -- it handles more e-commerce than Amazon.com Inc. and EBay Inc. combined -- curtails its pace of expansion.
The company said last August it would buy back shares over a two-year period, mainly to offset dilutions such as from employee compensation programs. Jack Ma currently owns a stake of about 5 percent, the largest shareholding by an individual, while Tsai has about 0.2 percent, according to data compiled by Bloomberg.
Ma and Tsai have seen their personal wealth eroded by the share price plunge. The co-founder is currently worth $26.8 billion, making him China’s richest person according to the Bloomberg Billionaires Index. His deputy is worth about $4.4 billion.
(An earlier version of this story corrected Alibaba’s role in the stock purchase.)