Alibaba Group Holding (BABA) – Get Free Report shares edged lower Tuesday, after hitting a six month high in Hong Kong trading Monday following news that billionaire meme-stock investor Ryan Cohen has built a multi-million stake in Asia’s biggest tech company.
Cohen, the founder of Chewy.com (CHWY) – Get Free Reportis reportedly seeking changes within the group as part of his investment, which he began building in August of last year, and has pushed for an increase in his share buyback plans.
Cohen, who has scored big activist wins with stakes in GameStop (GME) – Get Free Report and Bed Bath & Beyond (BBBY) – Get Free Reporthas told Alibaba it can grow its overall digital sales by double-digits, while generating free cash flow growth of 20% over the next five years, according to multiple media reports.
Alibaba’s shares, meanwhile, have risen more than 34% over the past month as China moves to re-open the world’s second largest economy following years of pandemic-era restrictions and Beijing looks to ease its oversight of domestic tech companies.
Last week, in fact, Guo Shuqing, a Chinese Communist Party secretary of the People’s Bank of China, said Monday that the two-year investigation into ‘the tech sector will be ‘normalized’ over the coming months, with support provided to those companies prepared to play a bigger role in domestic job creation as the economy attempts to recover from its long Covid-era pullback.
Alibaba may also find itself unfettered by political influence following a move by its founder, Jack Ma, to cede control of subsidiary Ant Financial after the government effectively stepped-in to scrap its planned $37 billion IPO in late 2020.
Alibaba’s US-listed shares were marked 0.13% lower in pre-market trading Tuesday to indicate an opening bell price of $116.86 each. The group’s Hong Kong-listed shares traded at a six-month high of $116.80 each on Monday.
Alibaba posted revenues of around $29 billion for the three months ending in September, the group’s fiscal third quarter, with growth slowing to around 3% on an annualized basis thanks to a pullback in consumer spending like to the country’s Covid crisis.
The group also declined to publish official ‘Singles’ Day’ sales data in November for the first time, with CEO Daniel Zhang noting that “the resurgence of Covid has affected one area after another, resulting in abnormal or suspended logistic service in different places. “
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