Ma Takes Over as Alibaba's Top Shareholder, Boosting Market Value by Billions
Even after experiencing three years of "darkest hour," with Alibaba's market value plummeting by 78%, Jack Ma has demonstrated his confidence in the company through concrete actions. Recently, Jack Ma and Joe Tsai jointly increased their holdings in Alibaba stocks, not only breaking the previous rumors of cashing out but also replacing SoftBank as the largest single shareholder of Alibaba.
As Alibaba's stock price continued to decline, Jack Ma and Joe Tsai, as the company's founders, finally took action.
On January 23rd, Jack Ma and Joe Tsai, founders of Alibaba Group, significantly increased their holdings in Alibaba stocks. According to a 13F filing on the U.S. Securities and Exchange Commission's website, Joe Tsai's family fund, Blue Pool, increased its holdings in Alibaba stocks worth $150 million.
In addition, Jack Ma, founder of Alibaba Group, also made a substantial increase in his holdings of Alibaba stocks during the same period, with an increase of $50 million.
Affected by this news, Alibaba's U.S. stock price once surged by more than 8%, closing at $74.02 per share, an increase of 7.85%. Compared to the previous day, the market value increased by $13.7 billion, equivalent to nearly 100 billion yuan in RMB; the Hong Kong stock opened up more than 6%, closing at 72.6 Hong Kong dollars per share, an increase of 7.32%.
Advertisement
With Jack Ma's continuous increase in holdings, he has replaced SoftBank and Masayoshi Son as the largest single shareholder of Alibaba.
Jack Ma Becomes Alibaba's Largest Shareholder
For Jack Ma, the current difficulties faced by Alibaba seem to be bound to pass.
In recent months, Jack Ma has been buying Alibaba stocks. According to media reports, last year alone in the fourth quarter, Jack Ma bought about $50 million worth of Alibaba's Hong Kong stocks. This also directly increased Jack Ma's shareholding ratio in Alibaba to more than 4.3% reported at the end of 2021.
According to Morgan Stanley's calculations, SoftBank, controlled by Masayoshi Son, has reduced its Alibaba shares through forward contracts, with its shareholding ratio dropping from about 7% in December 2022 to less than 0.5% in May last year. As a result, Jack Ma has become the largest single shareholder of Alibaba.Joining Jack Ma in action is Joseph Tsai.
According to the regulatory filings with the U.S. Securities and Exchange Commission, Joseph Tsai spent $151.7 million to purchase 1.957 million shares of Alibaba's U.S.-listed stocks through his Blue Pool Management family investment vehicle in the fourth quarter of last year, becoming Alibaba's second-largest shareholder. It is reported that last year, Joseph Tsai's shareholding ratio in Alibaba was 1.4%.
In fact, Alibaba has been trying to stop the continuous decline in its stock price through share buybacks. At the end of December 2020, Alibaba announced the largest share repurchase plan in the company's history, with a total fund of $10 billion.
In August 2021, Alibaba increased the repurchase quota to $15 billion, and in March 2022 it further increased to $25 billion. In November of the same year, Alibaba raised the repurchase quota to $40 billion in one go, and extended the validity period to the end of March 2025.
It is reported that in 2023 alone, Alibaba repurchased a total of 897.9 million ordinary shares of the company at a total price of $9.5 billion (approximately 68 billion yuan), making it the Chinese internet company with the largest repurchase effort. As of the end of 2023, Alibaba's share repurchase plan had a remaining $11.7 billion.
It is worth noting that Alibaba's stock price plummeted by more than 10% in the fourth quarter of last year. Jack Ma and Joseph Tsai chose to act at this time, and it is not difficult to see their confidence that Alibaba will inevitably weather the "winter."
In fact, there have been previous market rumors that Jack Ma reduced his holdings in Alibaba. Currently, it seems that he has not only "not sold a single share" but is also continuously increasing his holdings.
On November 16, 2023, the 144 filings disclosed by the U.S. Securities and Exchange Commission showed that Jack Ma's trust family JC Properties Limited and JSP Investment Limited (both British Virgin Islands companies) both chose to cash out 5 million shares of Alibaba (a total of 10 million shares), and planned to sell them on November 21. According to the latest stock price, the market value is $870.7 million, equivalent to about 6.3 billion yuan.
Although Jack Ma has repeatedly stated that "Alibaba's stock is currently far below the actual value of Alibaba, and he will not sell," this still directly led to Alibaba's stock price plummeting by 9.14% before the late market, with a total market value loss of over ten billion.
Alibaba, on the other hand, stated that this is a long-term equity plan application that began on November 21, 2023. The application sets several preconditions for the option to sell Alibaba shares. Jiang Fang also revealed: "Earlier this year (2023), Jack Ma signed a share reduction contract with a stock broker in accordance with the U.S. SEC Rule 10b5-1. According to the regulations, in mid-November 2023, an announcement will be made about this conditional future share reduction plan. The selling price agreed upon in August 2023 was much higher than the current stock price, so Mr. Ma did not sell any shares."However, it is true that Jack Ma did sell a significant amount of shares during Alibaba's stock price climb. After Alibaba's IPO in 2014, Ma gradually sold stocks worth over 40 billion yuan from September 2014 to November 2019; subsequently, he sold approximately 30 billion yuan worth of Alibaba stocks from November 2019 to July 2020.
Additionally, from the changes in equity, in the prospectus disclosed when Alibaba returned to the Hong Kong Stock Exchange in November 2019, Ma's family directly or indirectly held about 6.1% of Alibaba's shares, totaling 1.278 billion shares.
Three Years of Darkest Hour
In October 2020, Alibaba's market value once exceeded 800 billion US dollars. At that time, the confident Jack Ma might not have imagined that what awaited him and Alibaba were three years of plummeting stock prices.
In September 2014, Alibaba went public on the New York Stock Exchange, creating the largest IPO in American history and raising 21.8 billion US dollars in one go. At that time, Alibaba was unparalleled in its glory, and the company's market value continued to soar, making Alibaba a business card of China's internet industry.
This prosperity lasted for six years and reached its climax in October 2020. At that time, Alibaba's total market value reached a peak of 857.7 billion US dollars, ranking sixth in the world, only behind Apple, Microsoft, Google, Amazon, and Saudi Aramco. No one could have imagined that Alibaba's "darkest hour" would come so quickly.
In the following three years, the anti-monopoly crackdown on platform economies dealt a significant blow to Alibaba. Before Alibaba could recover, it was surrounded by strong competitors, and the company's stock price continued to fall. As of January 24, 2024, Alibaba's market value was only 188.3 billion US dollars, a drop of nearly 670 billion US dollars from Alibaba's most brilliant moment.
During this period, Alibaba was fined heavily. First, on April 10, 2021, based on the behavior of Alibaba Group's abuse of market dominance in the online retail platform service market within China, the State Administration for Market Regulation imposed an administrative penalty on it, ordered it to stop illegal activities, and fined it 4% of its sales in China in 2019, amounting to 18.228 billion yuan.
On December 29, 2023, Alibaba was heavily fined again for the "two choices" incident. The statement released by JD.com, "Regarding JD.com's First-instance Victory in the Case of JD.com v. Alibaba 'Two Choices'", showed that the Beijing Higher People's Court determined that Alibaba's abuse of market dominance to implement the "two choices" monopoly behavior was established, causing serious damage to JD.com, and ordered Alibaba to compensate JD.com with 1 billion yuan.
So far, Alibaba's fines and compensation amounts in the past three years have exceeded 19 billion yuan. Fortunately, with the final "knife" falling at the end of 2023, there is one less unstable factor on Alibaba's transformation path."Breaking Winter": Alibaba in Transition
On November 30, 2023, Alibaba's market value was surpassed by the "little brother" Pinduoduo, which was established in less than a decade. During that time, an Alibaba employee posted, "It's hard to sleep at the moment, and I dare not think about it. That seemingly insignificant 'slash' is almost becoming the big brother."
Jack Ma personally replied, saying: "I firmly believe that Alibaba will change, Alibaba will reform. All great companies are born in the winter. The AI e-commerce era has just begun, which is an opportunity and a challenge for everyone. Everyone has been outstanding, but those who can reform for the sake of being outstanding tomorrow and the day after tomorrow, and are willing to pay any price and sacrifice, are the organizations that command respect. Return to our mission and vision, Alibaba people, let's go!"
In fact, Alibaba, which is in the "cold winter," is taking action, and actively seeking change remains the main theme of the company.
On March 28, 2023, Alibaba Group held a president's meeting and announced a large-scale restructuring plan. Alibaba will establish six major business groups, which can independently raise funds and even go public in the future. Specifically, in the "1+6+N" organizational structure, "1" represents a single Alibaba listed company entity; "6" refers to six business groups, namely the Cloud Intelligence Group, Taobao Tmall Business Group, Local Life Group, Cainiao Group, International Digital Business Group, and the Great Entertainment Group; and "n" refers to several independent business companies.
It is worth mentioning that even in adversity, Alibaba's performance is still commendable. On the evening of December 22, Alibaba released its interim report for the fiscal year 2024. Despite a series of setbacks and difficulties, the company still achieved a revenue of 458.946 billion yuan during the reporting period, achieving a year-on-year growth of 11%.
However, it seems that Alibaba's "cold winter" has not yet completely passed.
It is reported that after the split, Alibaba Cloud, which was once highly regarded by all parties, has temporarily lost its momentum. Alibaba Cloud is the third-largest global and the largest domestic public cloud service provider, and it has a complete opportunity to become the first cloud computing super unicorn to rush to the market. As Alibaba's "face card," the obstruction of Alibaba Cloud's IPO has undoubtedly caused many investors to lose confidence.
For all Alibaba people, to get through the "winter" and grow into a great company, the joint efforts of everyone are still needed.