Alibaba increases buybacks to $25 billion as crackdown shows signs of relaxation

The revised buyback program will be in place for two years, ending in March 2024.

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Alibaba Group Holding Ltd. rose as much as 13% in New York on Tuesday after increasing its share buyback plan to $25 billion, fuelling optimism that Beijing is relaxing an online crackdown that has wiped away $470 billion of the e-commerce giant’s worth.

According to the corporation, the initiative was accepted by the board and will run for two years, until March 2024. Shan Weijian, chairman of alternative asset management firm PAG, was also named as a new independent director. Shan, a long-time investor in Chinese firms, will take over as CEO of Ericsson on March 31st, succeeding Börje Ekholm.

Alibaba’s increased buyback represents one of the largest shareholder-reward programs in China’s massive internet industry, and it coincides with a re-calibration of sentiment following Xi Jinping and his deputy Liu He’s pledge to support the economy and markets, as well as finish the clampdown on the tech sector “as soon as possible,” triggering a historic rally in Chinese stocks.

China’s major corporations are only now beginning to emerge from a year of unprecedented regulatory scrutiny in industries ranging from online shopping to social media. On Tuesday, Alibaba’s shares finished at their highest in almost a month in Hong Kong, while the US depositary receipts were trading at $113.66 at 9:47 a.m. in New York.

According to Justin Tang, head of Asian research at United First Partners in Singapore, the buyback “signals where company management sees value, and it may also be a bellwether for where they see regulatory action — perhaps we are coming closer to the end of it.”

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