NEW YORK (TheStreet) -- Alibaba Group Holdings (BABA) - Get Report shares are rallying 4.83% to $70.14 on Monday afternoon as the company, Chairman Jack Ma, and Vice Chairman Joe Tsai agreed to buy back shares worth $500 million, Reuters reports, citing China's Sina News.
Ma and Tsai will use their private funds to purchase shares, but exactly how much each party will buy back and other details of the repurchasing agreement were not disclosed.
This comes as the stock has fallen about 20% over the past 12 months amid a weakening Chinese economy, leaving investors wondering how Alibaba could overcome economic challenges.
Back in August, the e-commerce giant announced plans to contribute to its $4 billion stock purchase program over a two-year period to help offset the impact of its share-based compensation programs. Today's announcement will be a part of that strategy.
In addition, the company said last week that it was in talks with banks for loans of about $4 billion as it looks to expand its growth.
Over the past two years, the Hangzhou, China-based company has been aggressively taking measures to acquire a wide range of companies, including ones in hired car and social networking service industries, in hopes that adding new products could draw in more customers.
Separately, TheStreet Ratings currently has a "Sell" rating on the stock with a letter grade of D+.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: BABA