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Alibaba Increases Stock Buyback Amid Extended Price Decline

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Alibaba Group Holding Ltd. Continues to Boost Stock Repurchases Amid Prolonged Price Decline

Alibaba Group Holding Ltd. revealed on Tuesday its ongoing increase in stock buybacks as its share prices faced persistent challenges.

The China-based e-commerce giant reported a total expenditure of $5.8 billion to repurchase approximately 77 million American depositary shares (ADS) during the quarter ending June 30.

This amount marks an increase from the $4.8 billion spent in the previous quarter, doubling the $2.9 billion spent in the quarter ending Dec. 31, and more than tripling the $1.7 billion spent in the quarter ending Sept. 30.

Ahead of the disclosure, Alibaba’s U.S.-listed shares, ticker symbol BABA, edged up 0.8% in premarket trading. Despite a brief spike in mid-May that briefly lifted the stock to an eight-month high, Alibaba’s shares ended June with a quarterly decline of 0.5%, contributing to a broader 17% decline over the past three quarters.

Based on the amount spent and the number of ADS repurchased, Alibaba’s average buyback price was approximately $75.32 per ADS. This figure is below the volume-weighted average price of $76.68 for the ADS during the quarter but higher than the quarter-end closing price of $72.

Alibaba has allocated $15.2 billion to stock repurchases over the past four quarters, which amounts to around 8.7% of its current market capitalization of $174.54 billion. As of June 30, the company disclosed $26.1 billion remaining in its stock repurchase program, representing about 15% of its current market cap. There were 2.38 billion ADS outstanding as of the same date.

Over the past year, Alibaba’s stock has experienced a decline of 13.4%, while the iShares MSCI China ETF (MCHI) has shown a 2.1% gain, and the S&P 500 index (SPX) has rallied 23%.

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