Alibaba buys back shares worth $4.8bn 

Alibaba Group bought back shares valued at $4.8 billion in the March quarter. On Tuesday, the Chinese e-commerce firm said it had made its second biggest-ever repurchase after whining up its shares buyback plan in February.

In response to investor unease regarding its growth prospects and increasing competition from emerging market rivals like PDD, Alibaba has announced a significant expansion of its share buyback program by an additional $25 billion.

Expanding Buyback Plan

Alibaba, listed on both the Hong Kong and U.S. stock exchanges, had already repurchased $2.9 billion worth of shares in the previous quarter. 

The decision to further bolster the buyback plan underscores the company’s commitment to assuage investor concerns amidst mounting challenges.

Market Performance and Concerns

Despite its previous successes, Alibaba’s shares have faced a downturn, losing over 6% of their value this year. Investors are increasingly apprehensive about the company’s declining earnings, reduced per-user spending, and the overall downturn in Chinese consumption.

Competition from Rivals

Alibaba’s market dominance has been challenged by emerging competitors such as PDD and ByteDance, the parent company of TikTok. The company is grappling with a loss of market share as these rivals gain traction in the competitive landscape.

Financial Performance

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The internet giant reported a significant 77% decline in net income to ordinary shareholders in the third quarter, amounting to 14.4 billion yuan ($1.99 billion). 

This decline was primarily attributed to impairments associated with investments in entities like hypermarket operator Sun Art and online video streaming service Youku.

Strategic Restructuring

Alibaba is currently undergoing a strategic restructuring, splitting into six distinct units following the appointment of a new chief executive. 

The company has abandoned plans to list its cloud division and logistics arm, opting instead to refocus on its core e-commerce business.

Alibaba’s decision to ramp up its share buyback program reflects its determination to address investor concerns and navigate the evolving market landscape while reaffirming its commitment to long-term growth and resilience.