In its most recent filing, Alibaba (NYSE:BABA) exhibited a significant acceleration in its share buyback activities, buying back 524 million shares for $4.8 billion during the January-March 2024 period.
This marks “a meaningful step-up in pace vs. the average quarterly amount of US$2.6bn over F1Q-F3Q24,” Morgan Stanley analysts said in a Wednesday note.
Following these buybacks, and after adjusting for Employee Stock Ownership Plan (ESOP) allocations, Alibaba has effectively reduced its total number of shares by 5.1% over the fiscal year 2024.
“Last 12-month buyback (US$12.5bn)+ dividend (US$2.5bn for F23) would imply 8% yield,” analysts highlighted.
Alibaba stock closed 0.6% lower in New York on Wednesday.
Meanwhile, Morgan Stanley has also observed that Alibaba has maintained its strategy of divesting non-core assets throughout the year.
This includes further reducing its stake in Xpeng and selling off its holdings in Bilibili, among other actions. Moreover, during the Cainiao conference call, Alibaba's management emphasized the strategic importance of express delivery companies to its operations.
As a result, the e-commerce giant has indicated it does not intend to divest from these types of assets.
“As part of the capital management plan, we expect the monetization of non-core assets will likely continue to fund the enhanced shareholder return with more frequent updates from the company,” analysts said, suggesting an approach that could further stabilize Alibaba stock value over time.