Alibaba recently announced a $25 billion share buyback program after experiencing lower-than-expected revenue in the December quarter. The e-commerce company saw its stock drop 5% after revealing its earnings report, prompting the buyback offer to instill confidence in its business outlook and cash flow. The expanded repurchase program, now totaling $35.3 billion, will run through March 2027. Alibaba’s tough 2023 included a major corporate restructuring and high-profile management changes, with the company’s fiscal third-quarter earnings report revealing a slower revenue growth and a 69% drop in net income compared to the previous year. The challenging macroeconomic environment in China, coupled with consumer weakness, has affected Alibaba, with its Taobao and Tmall platforms experiencing modest growth, while its cloud computing business saw a 3% rise in sales. Despite these challenges, Alibaba’s international commerce business, which includes platforms like AliExpress and Lazada, posted a 44% increase in revenue. CEO Eddie Wu emphasized a focus on growth in e-commerce and cloud, with a commitment to improving user experiences and reinforcing market leadership. The company is open to exploring separate financing for its business units and plans for potential spinoffs, subject to market conditions and careful timing considerations. The unexpected departure of key figures within the company has added to its challenges. Alibaba’s focus on generating synergies within its business units is seen as a strategy to reflect the overall value of the group.
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