Chinese billionaire and Alibaba co-founder Jack Ma is cashing out more than $9.6 billion after selling a portion of his stake in the e-commerce giant. Ma is selling his stake at a very opportune time as Alibaba's share prices have remained at an elevated level despite the global economic downturn.
According to the company's annual filing, which was released on Friday last week, Ma had reduced his stake in Alibaba from 6.4 percent to 4.8 percent. The exact amount of Ma's divestment, or the price of each share sold, was not immediately disclosed. However, based on the company's current share prices, Ma may have walked away with more than $9.6 billion in his pocket after the divestment.
Since Ma had reported his 6.4 percent holding in the company about a year ago, Alibaba's share prices have surged by more than 40 percent. Despite the economic slowdown in China caused by the spread of the coronavirus pandemic, the e-commerce giant was still able to report better-than-expected earnings, thanks to the influx of online shoppers amid the nationwide lockdowns and shelter-in-place orders.
Consumer demand for products online fueled the company's earnings for the first and second quarters, beating average analysts' forecasts for its earnings growth. Ma originally divulged how much stake he had in the company when he stepped down as its executive chairman in September. During that time, Ma explained that he wanted to step down from the position so that he could focus more on his philanthropic pursuits.
At the height of the pandemic, Ma spent billions of dollars of his own money in supporting the global effort to control the spread of the coronavirus. In March, Ma donated millions of surgical masks and test kits to different countries. He also pledged to donate 500,000 additional test kits and one million masks to the U.S. to help it mitigate any further spread of the disease.
Apart from Ma, Alibaba's current executive vice-chairman, Joseph Tsai, had also donated millions of dollars worth of medical equipment through his charity to multiple countries. Like Ma, Tsai had also divested some of his shares in the company over the past year. Tsai reportedly reduced his stake in the company from 2.3 percent to 1.6 percent, cashing out an estimated $4.1 billion so far.
Ma and Tsai have slowly let go of their responsibilities in the company, handing over control to new executives. When Ma stepped down, his position was taken over by Daniel Zhang. According to Ma, he plans to eventually sell up to 21 million of his shares in the company to fund his philanthropic efforts.
