Alibaba surges as much as 11% after Chinese e-commerce giant raises its share repurchase program to $25 billion

• Alibaba said on Tuesday it would increase its share repurchase program to $25 billion from $15 billion in August.

• This is the largest-ever buyout plan from the Chinese e-commerce giant and will last until March 2024.

• Alibaba shares closed 11% higher in Hong Kong, while U.S.-listed shares rose as much as 11% before the open of trading.

Alibaba shares rose as much as 11% in Tuesday’s pre-market session after announcing its largest-ever $25 billion share repurchase program.

It is the largest-ever share repurchase plan for a Chinese e-commerce company and will run for two years until March 2024. The company had previously raised its share repurchase program in August last year to $15 billion, up from $10 billion.

Alibaba said it repurchased approximately $9.2 billion worth of American Depositary Receipts, totaling approximately $56.2 million as of March 18, 2022, under its previous repurchase program.

“The increased share repurchase underscores our belief in Alibaba’s long-term, sustainable growth potential and value creation,” said Toby Xu, Alibaba’s deputy chief financial officer, according to Alibaba’s corporate news website.

According to the website, the company has increased its share purchase program as a sign of faith in its future development despite the pandemic.

The company’s shares were down 11.20% in Hong Kong on Tuesday and were last up 8.7% at around $112.66 at 6:35 a.m. EST. Its share has continued to decline by approximately 50% over the past 12 months.

“Alibaba’s share price does not accurately reflect the value of the company given our solid financial condition and expansion plans,” said the deputy chief financial officer.

The buyback program follows a surge in share prices in China and Hong Kong last week after Beijing promised to keep capital markets stable and said it supported overseas listings.

Chinese Vice Premier Liu He announced policies aimed at boosting financial markets and boosting economic growth after a decline in inventories.

“All policies that have a significant impact on capital markets should be coordinated in advance with financial management departments to maintain stability and consistency in policy expectations,” he said last Wednesday.

Alibaba shares surged nearly 30% the day after the announcement.

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