Shares of Chinese online retailer JD.com surged nearly 9% on Tuesday after the company announced a $2 billion stock buyback plan.
Why it matters: JD.com’s repurchase plan comes amid a tumultuous week for global markets as a result of the panic surrounding Covid-19, which has claimed more than 7,400 lives around the world.
- JD.com shares fell 11% over the past months, showing some resilience compared with the 29% plunge for the Standard & Poor’s 500 index over the same period.
Since the outbreak of COVID-19, JD.com has leveraged its strengths in supply chain, logistics and technology to ensure the normal operation of its various businesses. JD.com’s management team has always maintained firm confidence in the sustainable and long term development of the company.—JD.com spokesperson in an emailed statement
Details: JD.com’s board of directors has authorized a share buyback program under which the company may repurchase up to $2 billion of its shares over the next 24 months, according to a company statement.
- The buyback will be made on the open market at prevailing market prices, in privately negotiated transactions, in block trades, and others.
- The firm will fund the plan with its own cash balance, and it will not impact the company’s operations, the spokesperson said.
- JD posted strong growth for the fourth quarter, pushing shares up 12% on the same day. However, intensifying Covid-19 outbreak concerns ended the rally, with share prices falling to a low of $34.7 on March 16 from $44.9 apiece on March 5.
Context: The e-commerce giant is reportedly planning a secondary listing on the Hong Kong stock market as early as mid-2020, following the lead of rival Alibaba’s November listing.