Alibaba Group’s (NYSE:BABA) Hong Kong shares jumped on Wednesday, following the rise in their American counterparts following rumors that co-founders Jack Ma and Joe Tsai were buying stock in the massive e-commerce company.
The Hang Seng index gained 1.5%, and Alibaba’s HK shares (HK:9988) surged 5.5% to HK$71.30 by 21:20 ET, making them the best-performing stock. In overnight trading, the company’s American Depository Receipts increased by almost 8%.
Alibaba’s HK shares recovered from a 15-month low amid Wednesday’s gains.
According to a New York Times story, Tsai purchased approximately $151 million worth of American shares through his Blue Pool Management company, whilst Ma purchased $50 million worth of shares in Hong Kong during the fourth quarter.
Despite leaving his position as executive chairman in 2019, Ma continued to have a sizable ownership position in Alibaba. Daniel Zhang stepped down as chairman of the e-commerce company in 2023, and Tsai took over.
In 2023, Ma gave up his leadership of Ant Group, Alibaba’s financial division, after an unsuccessful attempt to IPO the company. In addition, he had mostly disappeared from the public eye since 2020 as a result of an intensifying regulatory crackdown on China’s largest internet companies.
The news on Tuesday gave Alibaba, which saw significant losses over the previous year due to the collapse of plans for a six-way split, some much-needed confidence. In addition, PDD Holdings (NASDAQ:PDD) was becoming a stronger rival in the e-commerce behemoth’s native market, and consumer spending in China did not significantly increase from the COVID-19 lows.
The company had also recently announced that it was having more trouble achieving its artificial intelligence goals because it was unable to obtain the newest semiconductor technology as a result of trade penalties imposed by the United States on China.
However, some analysts contend that Alibaba’s stock is cheap right now and is therefore a good pick for bargain hunters, pointing to the company’s solid foundation and ability to gain significantly from a recovery in the Chinese economy.
