Alibaba Group Holding said on Sunday its board has authorized an increase in the company's share repurchase program to $10 billion up from $6 billion. The move reflects the company's adequate cash flow and optimistic outlook for its future development, analysts said.
The share repurchase program will be effective over a two-year period through the end of 2022. The company has already started to implement the program this quarter, Alibaba said in a statement.
The move reflects Alibaba's self-confidence and cautiousness amid this period when China is ramping up anti-monopoly efforts and regulation targeting the fintech sector, Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology, told the Global Times on Monday.
"It indicates that the company has now sufficient cash flow and holds an optimistic outlook for its future development," Dong said.
Shares of Alibaba tumbled 3.86 percent to HK$219.4 ($28.3) at Monday's opening on the Hong Kong Stock Exchange while Ali Health down 2.54 percent following China's top financial regulatory authorities interviewed Alibaba Group's fintech offshoot Ant Group on Saturday.
Financial regulators, including the central bank, pointed out a range of major problems confronting Ant's current operations including its poor governance, risk monitoring, defiance of regulatory and compliance requirements, and illegal regulatory arbitrage.
In a quick response, Ant said it will set up an internal task force under the guidance of the regulators to implement the interview's requirements and regulate operation and development of financial businesses.
Alibaba's US stocks plunged 13.34 percent last Thursday, the largest drop in a single day since its listing, and the market value evaporated by nearly $100 billion.