Maybe the biggest sign of China’s slowing economic growth is a drop in price of e-commerce giant Alibaba Group Holdings.
China’s broader economy has caused Alibaba’s growth to slow so much that its stock plunged 20% last year. Alibaba’s stock has taken such a big hit that it closed last week below its initial public offering price of $68.
Things are so bad that Chairman Jack Ma and Vice Chairman Joseph Tsai will use their own money to buy stock as part of a $500 million corporate stock buyback plan, Alibaba said in a statement Monday.
In August, the company had said that the billionaire co-founder and his lieutenant would contribute to its $4 billion stock purchase program without specifying how much they would spend.
As China’s economy slows, revenues at the country’s largest online emporium are falling because of price cuts and competition in bigger cities. Other problems include lawsuits dealing with counterfeits.
In the August announcement, the company said it would buy back shares over a two-year period, mainly to offset dilutions from employee compensation programs. Ma currently owns a 5% stake, the largest individual holding in the company, while Tsai has about 0.2%, according to Bloomberg.
Ma and Tsai have seen their personal wealth eroded by the share price plunge. Alibaba’s founder is currently worth $26.8 billion, making him China’s richest person according to the Bloomberg Billionaires Index. His deputy is worth about $4.4 billion.