Jack Ma’s $77M stock purchase fails to ease Alibaba selloff

Alibaba Group ↗ 2.23% co-founder Jack Ma has purchased more than HK$600 million ($76.5 million) of the company's Hong Kong-listed shares, joining Chairman Joe Tsai and CEO Eddie Wu in a combined insider buying spree exceeding HK$800 million ($102 million). The purchases, made in the days following Alibaba's record HK$80 billion ($10.2 billion) share placement announced on August 23, represent an effort to restore confidence after the deal triggered an 8.5% selloff.finance.yahoo+1

Yet the gesture has done little to calm markets. As Bloomberg reported on Wednesday, the stock remains nearly 6% below its pre-deal close — a steeper decline than the 3% to 3.5% earnings dilution analysts estimate from the share sale.bloomberg+1

The Insider Buying Breakdown

According to Hong Kong stock exchange filings and sources cited by the South China Morning Post and Caixin, Tsai purchased approximately HK$80 million of shares on Monday and another HK$82 million on Tuesday at an average price of HK$113.47. Wu invested roughly HK$40 million on Monday. Ma's purchases, reported by state-backed STAR Market Daily and confirmed by sources familiar with the matter, exceeded HK$600 million over consecutive days.fashionnetwork+2

Shares rose about 3% over two sessions following the buying spree — a muted response that investors and analysts say reflects deeper concerns about Alibaba's financing approach rather than its AI ambitions.finance.yahoo

Why the Market Remains Uneasy

The placement was structured as a Regulation S deal executed over a weekend, limiting participation to non-US investors and narrowing the pool of potential buyers. Alibaba sold 710 million new shares at HK$112.70 each — an 8.4% discount to its previous close.stocktwits+1

"Our sense is the market's reaction is driven more by the way Alibaba chose to raise capital than by the fundraising itself," said Gary Tan, a portfolio manager at Allspring Global Investments.finance.yahoo

Homin Lee, a strategist at Lombard Odier, noted that Chinese tech firms face tougher investor scrutiny than US peers for similar capital raises. "The low margin, high-volume approach embedded in most China AI strategies makes AI capex a trickier catalyst from ROI perspective," he said.finance.yahoo

The AI Bet Behind the Capital Raise

Alibaba has committed all net proceeds to expanding its "full-stack" AI capabilities, including chips, computing infrastructure, and AI models. The company has pledged to spend more than 380 billion yuan ($56.5 billion) over three years on AI and reported a 45% increase in AI Cloud and Compute Services revenue in the June quarter.businesstimes+1

The company said it expects annualized revenue from AI products to near $10 billion this quarter and targets over $100 billion in combined AI and cloud revenue over five years. But capital spending in the June quarter approached $10 billion, contributing to a 75% drop in quarterly net profit.moneycontrol+2

Whether the AI outlay will pay off remains the central question for investors — one that extends well beyond Alibaba, with Nvidia ↘ 4.58% earnings this week serving as a broader test of the AI investment thesis.finance.yahoo