Alibaba Co-Founder Jack Ma Reduces Stake To 4.8%

Alibaba Group Holding Ltd.’s (BABA) co-founder Jack Ma has reduced his stake in the Chinese e-commerce giant to 4.8% from 6.2% over the past year.

The e-commerce platform’s 20-F annual filing released on Friday, did not provide any further details on the average selling price of the divested stake. Alibaba shares have appreciated about 40% since the company last disclosed its annual filing in June last year.

Ma last year stepped down as Alibaba’s chairman to be replaced by CEO Daniel Zhang.

In addition, Alibaba Executive Vice Chairman Joseph Tsai cut his stake in the company to 1.6% from 2.2% during the same period.

Also on Friday, Alibaba’s Zhang presented an ambitious goal-based plan, which envisages serving more than 1 billion consumers in China and facilitating more than RMB10 trillion of consumption on the company’s platforms in the next five years.

Longer-term, Zhang wants Alibaba to serve 2 billion consumers globally, create 100 million jobs and provide the necessary infrastructure to support 10 million small businesses to become profitable on the company’s platforms by 2036.

Alibaba revenue soared 35% over the last fiscal year, with net income up 75%. The e-commerce company has already served investors well with its shares surging 23% so far this year as stay-at-home mandates during the outbreak of the coronavirus pandemic forced more and more people to shop online.

Oppenheimer analyst Vincent Yu last week initiated the stock’s coverage with a Buy rating and a $275 price target, saying that Alibaba will remain the No.1 player in the e-commerce market as it strengthens efforts to attract customers from lower-tier cities, although competition looms.

We see the company’s strengths as crucial competitive barriers to newer market entrants, such as Pinduoduo, who over the past two years has aggressively used subsidies to pursue customers,” Yu wrote in a note to investors. “The company’s strategic position in the e-commerce value chain, and deep understanding of China’s retail environment are not only competitive strengths in its primary business, but also keys to expanding its presence in adjacent industries such as offline retail, food delivery, and cloud computing.”

Turning to other Wall Street analysts, the bulls have it. The Strong Buy consensus boasts 20 Buy ratings versus 1 Hold rating. The $266.90 average price target implies a modest 2.3% upside potential in the shares in the coming 12 months. (See Alibaba stock analysis on TipRanks).

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