Alibaba Group Holding Ltd. (NYSE: BABA), Chairman Jack Ma and Vice Chairman Joseph Tsai agreed to spend $500 million to buy back company’s shares after the Chinese e-commerce giant’s stock price slumped in 2016.
The company said on Monday that Ma and Tsai would use their own money to buy back stock. The $500 million stock purchases were first reported by Chinese news site Sina, but it didn’t report more details about the repurchasing agreement.
The $500 million stock repurchase is part of the $4 billion repurchase program that was announced in August. Alibaba had said in a regulatory filing in August that it would repurchase $4 billion of its shares over two year. The company had already repurchased 40.8 million shares for $2.74 billion during the quarter ended Sept. 30, 2015.
Alibaba share had plunged 20 percent over the past 12 months and the price was trading below its initial public offering price of $68 on Friday. Investors are worried about the slowdown economy in China and its impact on the consumption on Alibaba. Also, the company had already dominated 80 percent of China’s e-commerce market. There is little room for them to grow while they are still facing competition from smaller rivals such as JD.com Inc.
However, the Hangzhou, China-based Company is trying to expand its growth. The company was in talks with banks for about $4 billion loans last week to finance its acquisitions.
Alibaba shares rose 2.86 percent to $68.81 after market closed on Monday.