Company / Analytics

Analytics, 19 January 2023

Alibaba Stock Overview

Ryan Cohen, entrepreneur and activist investor born in Montreal, approached the Alibaba holdings board in August and later bought a stake in the company amounting to 1.55 million shares. Since this happened, the founder of Chewy has been pushing for Alibaba to buy back more of its shares. After news came out that the Meme share Icon had invested in Alibaba, the stock shot up by 3%. He told the company’s executives that the buyback program can be raised to 60 billion dollars.

The crackdown on China’s technology sector aimed at Jack Ma forced the billionaire investor to give up control of Ant Group company, an affiliate company of Alibaba. The company released a statement after this, saying that no single investor or joint with other parties will have control over it. It said it would put in place measures and restructure its command and hierarchy chain to ensure this.

Alibaba Group Holdings Limited

Alibaba is a multinational technology company based in china. It was founded in 1999 by Jack Ma, Joseph Tsai, Peng Lei, and 14 others. It is headquartered in Hangzhou and the Cayman Islands and deals with e-commerce, retail, internet, and technology. Its subsidiaries are Alibaba Cloud, Alibaba Investment, and Cainiao among others.

The company received 25 million U.S. dollars in October 1999 as an investment by Goldman Sachs and Soft bank. Through its subsidiary, Alibaba Investment, the company has invested in companies such as:

Jack Ma’s Step Down

In 2020 the communist party of China started an unprecedented multi-pronged crackdown on several sectors of its market. The effects of this on the tech sector that affected the billionaire founder of Ant Group was the loss of his power in both Alibaba and Ant Group, both of which were among his most significant investments.

In that same year, Ant Group was forced to end its initial Public Offering (IPO) 48 hrs before its scheduled time for a listing. This was sparked in 2019 when Jack Ma criticized the Chinese bank regulators, saying they acted like ‘pawn shops’. This led to him disappearing from the public eye for a time.

In the first week of this year, Jack Ma stepped down as head of Ant Group, an affiliated company of Alibaba. His step down comes over three years after the tech company laid out its transition plan. The transition laid out the one-year timeline for the successor, Daniel Zhang, to take over from Jack Ma. the transition plan in an open letter to the staff synchronized with the IPO of Ant Group, which was expected to shoot.

Since this dispute with the Chinese government, he was again seen on the public scene as he gave up his power in the popular digital wallet. After the crackdown had lasted 2 years and scattered Ant Group’s IPO, the government announced days later that it was over.

Ryan Cohen Invests in Alibaba

Ryan Cohen was born to a Jewish family in Montreal. He is among the Icons of the Meme stocks. Meme stocks is the name used to describe shares of a company that has become popular and gone viral by virtue of skyrocketing social sentiment online and on social media platforms. Meme stocks arose in 2020 and include GameStop, and Bed, Bath and Beyond both of which Ryan Cohen has invested in among others. He built up a stake in Alibaba Group Holdings worth millions of dollars in the last six months of last year. Unnamed sources disclosed that he is pushing for the company to increase the budget money for buying back its shares.

Ryan Cohen built his fortune by co-founding the online pet retailer, chewy and investing in companies like GameStop and Apple among others. He reached out with an offer to the board of Alibaba last August.

Stock outlook and Investor’s Note

The Alibaba stock was trading at 114.50 Hong Kong dollars as of the time of writing. The stock has been on the rise since November last year having shot by 10.20% during this time.

The company’s market value currently stands at 300 billion dollars. Cohen is known for propelling investors to take up moribund companies such as GameStop. in his communications with Alibaba, he explained his views on how the company could reach double-digit sales growth and almost 20% free cash flow in a period of five years to come.

He is said to be ready and eager to have a wonderfully collaborative, long-term relationship with Alibaba and he has praised its management.

Considering the spike that the stock experienced after this news was made public knowledge, it is true to say that investors current and future should keep a close eye on the stock this week and most importantly stay informed.

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