Jack Ma Overtakes SoftBank as Alibaba's Top Shareholder

Alibaba founder Jack Ma increased his stake in Alibaba by approximately $50 million in the fourth quarter of 2023,Exchange rate surpassing the 4.3% stake reported at the end of 2021. Meanwhile, the current chairman of Alibaba, Daniel Zhang, through his family investment platform Blue Pool Capital, purchased $150 million worth of Alibaba shares.

Sources reveal that Jack Ma and Daniel Zhang collectively now hold a larger stake than that of SoftBank. Over the past two years, SoftBank Group, controlled by SoftBank, has reduced its stake through forward contracts, from about 7% in December 2022 to around 2% in March of last year, and then to less than 0.5% by May. As a result, Jack Ma has now replaced SoftBank as Alibaba's largest shareholder.

The news of Jack Ma's increased stake in Alibaba stimulated market sentiment, leading to a higher opening for Alibaba's U.S. stock after the news was disclosed, closing at $74.02 on Tuesday, up $5.39 from the previous trading day, an increase of 7.85%.

SoftBank was one of Alibaba's earliest investors and was the largest shareholder with about 34% of the shares at the time of Alibaba's IPO in 2014. Since then, SoftBank has been downsizing its stake in Alibaba. As of July 2022, SoftBank's stake in Alibaba had dropped to 23.9%.

Between July 2022 and July 2023, SoftBank accelerated the sale of Alibaba shares. In July 2023, SoftBank's stake in Alibaba dropped to 13.9%. Additionally, filings with the U.S. SEC reveal that SoftBank sold Alibaba shares worth approximately $7.2 billion through prepaid forward contracts, eventually reducing its stake in Alibaba to 3.8%.

Jack Ma previously had a lower shareholding, with Alibaba's financial report in 2020 showing Ma's stake at 4.8%, and thereafter it was not disclosed again as it fell below 5%. In November 2023, when rumors emerged that Jack Ma planned to sell his shares in Alibaba, the company’s U.S. stock temporarily fell more than 9%.

However, Alibaba Group Partner and Chief Talent Officer Trudy Dai later clarified on Alibaba’s internal network that "Jack Ma had not sold a single share" and stated that "the current Alibaba stock is significantly undervalued, and Jack Ma won't sell."

Despite SoftBank's continued divestment, the increased holdings by Jack Ma and Daniel Zhang could sustain market confidence in Alibaba. On January 23, following the disclosure of Ma and Zhang’s increased stakes, Alibaba’s U.S. stock rose more than 7% in pre-market trading.

Over the past year, Alibaba has been the Chinese internet company with the most aggressive share buyback program, repurchasing a total of 897.9 million ordinary shares for a total price of $9.5 billion in 2023. As of December 31, 2023, Alibaba Group still has a share repurchase program with an available $11.7 billion, valid until March 2025.

Jack Ma becoming the largest shareholder of Alibaba reflects his strong confidence in the company’s future and the market's sustained interest in Alibaba.

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