Meme-stock investor Ryan Cohen has amassed a stake in Alibaba Group Holdings and is now actively pushing the Chinese e-commerce giant to expand its share buyback program, The Wall Street Journal and other media outlets reported late on Monday.
According to people familiar with the matter, Cohen built up the stake, worth hundreds of millions of dollars, in the second half of 2022. Cohen’s stake is small relative to Alibaba’s
$300 billion market value.
Cohen reportedly first contacted Alibaba in August last year to tell the board its shares were undervalued and that it could achieve double-digit sales growth and up to 20% growth in free cash flow in the next five years.
Alibaba said in November that the board had accepted the expansion of the company’s share repurchase program by $15 billion. It has been extended to a total $40 billion until March 2025.
Cohen has reportedly also told the board that the plan could be boosted to $60 billion, and added that Apple’s
buyback program, where he owns more than $800 million worth of shares, could be mirrored.
Alibaba’s shares have been dampened by consumer sentiment in China amid the country’s strict Covid-19 protocol and was targeted by Beijing’s crackdown on technology companies.
Its ADR stock has scaled 60% from lows in October last year, but are still lower than the highs of trading at $300 seen in late 2020. The stock slipped 0.2% to $116.99 in early premarket trading on Tuesday.
Cohen is known for taking activist stakes in meme stocks GameStop
and selling his stake in Bed Bath & Beyond
He has a net worth of over $2.5 billion and made his fortune on founding online pet retailer Chewy Inc.
He has tweeted cryptically about the Chinese economy in the last year, staying silent on Alibaba.
China’s economic growth fell to its second-lowest level in decades last year, but recent activity is reviving the economy as Covid-19 restrictions were lifted in December.