Stock plunge in China pushes Alibaba to increase its US shares buyback
29 Sep 2015
Due to the ongoing Chinese stocks generalised plunge, Alibaba Group Holding Ltd., is moving ahead with its 4 billion dollars’ worth of shares repurchase plan over two years. JD.com Inc. has authorised 1 billion dollars for the same purpose.
The selloff that has pushed an index of U.S.-traded Chinese stocks down more than 30 percent since June has some of the biggest companies seeking to buy back record numbers of shares, highlights Bloomberg.
In fact, Alibaba’s stock has tumbled 50 percent since a high in November to trade below their public offering price of 68 dollars. Likewise, JD.com has lost 32 percent since its high in June.
The buyback programs come as the Bloomberg China-U.S. Equity Index trades near the lowest levels in 18 months. American depository receipts have likewise tumbled due to the ever growing concern the magnitude of the slowdown in the world’s second-largest economy is worsening.
In this regard, Brad Gastwirth, chief executive officer of ABR Investment Strategy, pointed out in an interview that “It’s a positive sign that they believe in their growth opportunities and their strategies.”