Exclusive | Jack Ma, Joe Tsai replace SoftBank as Alibaba’s largest shareholders by scooping up tech giant’s tumbling shares in Hong Kong, New York

Ma, who retired as Alibaba’s executive chairman in 2019, bought about US$50 million of stock in the fourth quarter, raising his stake to more than 4.3 per cent
Joe Tsai picked up US$150 million of shares through his family investment vehicle Blue Pool Capital Management

Alibaba

Zhou Xin

Published: 10:25am, 24 Jan 2024

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Jack Ma and Joe Tsai, the co-founders of Alibaba Group Holding, have emerged as the two largest shareholders of the Chinese e-commerce giant by aggressively scooping up its tumbling shares in New York and Hong Kong.

Ma, who retired as Alibaba’s executive chairman in 2019, bought about US$50 million of stock in the fourth quarter, raising his stake beyond the 4.3 per cent reported at the end of 2021, to become the largest single shareholder, according to sources familiar with the matter.

Joe Tsai, who took over Alibaba’s chairmanship from Daniel Zhang on September 10 last year, paid US$151.7 million for 1.957 million of Alibaba’s US-listed shares last quarter through his family investment vehicle Blue Pool Management, becoming the second-largest shareholder, according to a filing in New York. He owned 1.4 per cent of the company’s shares last year, according to Alibaba’s annual report.

Their aggressive buying amid an 11-per cent plunge in Alibaba’s stock price in the fourth quarter, underscored their confidence that the tech giant they established in Ma’s Hangzhou flat 25 years earlier would turn around its fortunes, sources said. It is the first time in nearly a quarter of a century for a Chinese shareholder to own the largest stake in Alibaba.

Joe Tsai (left) and Jack Ma during a press conference by Alibaba.com on 7 October 1999. Photo: Anthony Dickson

Tsai is also the chairman of the publisher of South China Morning Post, a wholly owned unit of Alibaba.

The combined shareholding of Tsai and Ma eclipsed SoftBank Group, which has progressively reduced its stake since Alibaba’s 2014 initial public offering. The Japan-based investor controlled by Masayoshi Son has trimmed its stake through forward contracts, cutting it from about 7 per cent in December 2022 to around 2 per cent by March last year and less than 0.5 per cent by May, according to calculations by Morgan Stanley.

The spokespeople of Alibaba declined to comment. Alibaba’s stock price has taken a beating in recent years after China’s regulators foiled the US$39.7 billion IPO by its Ant Group affiliate in 2020, 48 hours before it was due to launch the world’s largest fundraising in Shanghai and Hong Kong.

Jack Ma cedes control of financial software firm he bought in 2014

Since then, the tech giant had been slapped with a record fine, and had to undergo a series of restructurings to comply with China’s antitrust regulations. Alibaba’s share price has plunged 75 per cent from its peak of US$300 to the current level of about US$70 in New York.

The stock jumped 7.8 per cent overnight to US$74.02 in New York. Alibaba shares, listed in Hong Kong in 2019 in a secondary listing, surged 7.3 per cent to HK$72.60 on Wednesday, after rising earlier to as high as HK$73.

As Alibaba has turned from a poster child of value growth to a proxy of China economic slowdown and unpredictable regulatory risks, investors’ appetite for Alibaba has waned. It was dethroned by PDD Holdings, a much smaller e-commerce player in China, as the most valuable US-listed Chinese tech firm, prompting soul-searching among Alibaba employees about its problems and prospects.

Ma, who has distanced himself from Alibaba’s day-to-day management and has kept a low profile, congratulated its rival in a rare internal memo.

Meanwhile, Tsai has made a comeback to the group and conducted a sweeping restructure of the giant, with the newly appointed CEO Eddie Wu Yongming, also one of the founding members of Alibaba, betting on artificial intelligence and improved service to recharge growth.