$MCADE presale is now live!

Ryan Cohen has built a stake in Alibaba: here’s what he wants

By:
on Jan 17, 2023
Listen to this article
  • Ryan Cohen now has hundreds of millions of dollars worth of stake in Alibaba.
  • He wants the tech behemoth to further expand its stock buyback programme.
  • Alibaba shares have gained roughly 85% over the past three months.

Alibaba Group Holding Ltd (NYSE: BABA) is in focus on Tuesday after Ryan Cohen was reported to have built a stake in the multinational tech behemoth.

Why did he amass a stake in Alibaba?

The activist investor now has hundreds of millions of dollars worth of stake in the Chinese conglomerate – not very significant versus the company’s market cap of just over $300 billion.

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

Nonetheless, Cohen, who amassed the said stake in the back half of 2022, is pushing the eCommerce giant to further stretch its share repurchase programme, as per a WSJ report this morning.

Targeting Alibaba is quite a change of pace for the billionaire who’s known to focus his activist ventures on smaller companies like Bed Bath & Beyond. Alibaba shares have gained nearly 85% since late October.

Cohen wants a $20 billion increase in buyback

Anonymous sources also told the Wall Street Journal that Cohen first contacted the board in August of 2022 and said the Hangzhou-headquartered firm could increase its free cash flow by up to 20% in the next five years.

Subsequently, Alibaba expanded its stock buyback programme by $15 billion in November to a total of $40 billion to be executed by March 2025.

Now, though, Cohen is pushing for another $20 billion increase in share repurchase to $60 billion. Alibaba is yet to officially respond to the WSJ report.

In its latest reported quarter, Alibaba came up with only a 3.0% annualised growth in sales. Alibaba shares are still trading at less than half their record price in the final quarter of 2020. They’ve taken a massive hit over the past two years due to Beijing’s regulatory crackdown on tech titans.