Alibaba continues to invest and monetize, and this time it will reduce its holdings in Xiaopeng Motors.
Affected by this, yesterday, the US stock market Xiaopeng Motors closed down 7.54%, with an intraday decline of over 8.5%. Alibaba and Xiaopeng Motors have both provided explanations for this reduction in holdings.
Alibaba stated that "in accordance with its capital management goals, it has sold some of its shares in Xiaopeng." "We believe in Xiaopeng's prospects and look forward to continued cooperation with the company.".
Xiaopeng Motors stated that "Alibaba will continue to be the second largest shareholder of Xiaopeng Motors, holding nearly 8% of the shares, and will continue to carry out deep strategic cooperation with Xiaopeng Motors in areas such as cloud computing.".
The reporter found that recently, "reducing holdings" has become a high-frequency term on Alibaba: Jack Ma's reduction in holdings on Alibaba, Alibaba's reduction in holdings on Kuai Gou Taxi, Xiaopeng Motors, etc.
Alibaba has reduced its holdings by nearly $400 million, and the latest response is coming!
On December 15th local time, the US Securities and Exchange Commission (SEC) announced that Taobao China Holding Limited, a subsidiary of Alibaba, plans to sell 25 million shares of Xiaopeng Motors' ADRs (American Depositary Shares), with a total value of approximately $391 million (approximately RMB 2.78 billion). The announcement shows that the equity to be sold was acquired as a pre IPO investment on September 12, 2019.
As soon as the news was released, the stock price of Xiaopeng Motors, which was trading on the US stock market on the same day, suffered a significant drop, with a drop of over 7% as of the close.
The document also shows that the 25 million shares sold were purchased by Taobao China on September 12, 2019, before Xiaopeng Motors went public in the United States.
Since its establishment in 2014, Alibaba has been a staunch investor in Xiaopeng Motors, participating in multiple rounds of financing.
Faced with the huge impact of the news on the stock price, Alibaba and Xiaopeng Motors also urgently provided an explanation.
Alibaba stated, "We have sold some of our shares in Xiaopeng based on our capital management goals, reducing our holdings from 10.2% to 7.5%. Xiaopeng is one of the leaders in China's electric vehicle industry, and we have established a strategic partnership with it. We believe in Xiaopeng's future and look forward to continued cooperation with the company."
Xiaopeng Motors stated that Alibaba's reduction in holdings is a strategy of implementing its third quarter report's external communication on investment realization and return to shareholders, rather than a change in perception of Xiaopeng Motors. Alibaba will continue to be the second largest shareholder of Xiaopeng Motors, holding nearly 8% of the shares, and will continue to engage in deep strategic cooperation with Xiaopeng Motors in areas such as cloud computing.
Xiaopeng Automobile emphasized that the company has established a strategic cooperation with Volkswagen this year, and Volkswagen is currently Xiaopeng's third largest shareholder. Xiaopeng currently has over 40 billion yuan in cash on hand, with a positive free cash flow of several billion yuan in the second half of the year, indicating abundant cash and a significant improvement in cash flow.
The third quarter financial report shows that Xiaopeng Motors delivered 40008 vehicles in the third quarter, an increase of 72.4% compared to the previous quarter. Xiaopeng Automobile's total revenue in the third quarter was 8.53 billion yuan, an increase of 25.0% year-on-year and 68.5% month on month; The sales revenue of automobiles was 7.84 billion yuan, an increase of 25.7% year-on-year and 77.3% month on month.
Alibaba continues to optimize capital management
Jack Ma's reduction in holdings in Alibaba, Alibaba's reduction in holdings in Fast Dog Taxi and Xiaopeng Motors... Recently, Alibaba has frequently been associated with "reduction".
Specifically, in November, two "144 Forms" disclosed by the US Securities and Exchange Commission showed that JC Properties Limited and JSP Investment Limited, wholly-owned by the Jack Ma family trust, plan to sell 5 million shares of American Depositary Shares (ADS) as founder shares of Alibaba on November 21, involving a total market value of $8707 million.
Alibaba has also responded to this matter on the intranet. Among them, Alibaba Group partners Chief Talent Officer Jiang Fang mentioned in the post: "In order to invest in agricultural technology and public welfare projects both domestically and internationally, Teacher Ma's office signed a reduction contract with a stock broker earlier this year in accordance with the US SEC 10b5-1 regulations. According to regulations, this conditional future reduction plan will be announced to the public in mid November. The selling price set in August was much higher than the current stock price, so Teacher Ma did not sell a single share!"
A lawyer from Jack Ma's office previously replied, "The disclosed sale plan is a long-term plan. There has been no actual reduction in holdings of the plan at present. Jack Ma firmly believes in Alibaba, as the current stock price is far below its actual value, and he will still firmly hold onto Alibaba's stocks."
In December, according to documents from the Hong Kong Stock Exchange, Alibaba sold 255600 shares of Fast Dog Taxi on November 6th, with an average reduction price of HKD 0.6484 per share, and its shareholding ratio decreased from 12.01% to 11.97%. In the past year, although it has not been frequently disclosed, Alibaba has not stopped reducing its holdings, and its shareholding in Kuai Gou Taxi has decreased from 14.97% before going public to 11.97%.
In addition, in early December, Meinian Health, Surprise Home, Qianfang Technology, and Focus Media jointly announced that in view of the implementation of the separation of Alibaba Network, the newly established entity Hangzhou Haoyue will inherit the shares of the aforementioned listed company held by Alibaba Network through an agreement transfer.
A series of changes or organizational changes related to Alibaba.
On March 28th of this year, Alibaba launched the largest organizational change in its 24 year history, with Alibaba Group breaking down into several independent companies known as "1+6+N.".
Zhang Yong, then Chairman and CEO of Alibaba Group, issued a letter to all members, stating that he will further deepen the transformation and move towards a new stage of organizational governance - building a "1+6+N" organizational structure. Under the Alibaba Group, six major business groups and multiple business companies will be established, including Alibaba Cloud Intelligence, Taobao Tmall Business, Local Life, Cainiao, International Digital Business, and Da Wen Yu. The CEO responsibility system will be implemented under the leadership of the boards of directors of each business group and company, while Alibaba Group will fully implement the management of a holding company.
In addition, Alibaba's management stated in a conference call after the release of last month's quarterly financial report that they will continue to optimize capital management, improve investment returns, and enhance shareholder value. Since the beginning of this year, the stock price of Alibaba, which has been listed on the US stock market, has fallen by 18.79%. At the beginning of this month, Alibaba's total market value was surpassed by Pinduoduo.
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