What's Going On With Alibaba Stock Monday?

Alibaba Group Holding Limited BABA stock traded lower Monday as it decided to hold on to its stake in Ant Group, declining to participate in a share buy-back plan.

The People's Bank of China (PBOC) penalized Alibaba's fintech affiliate by 7.123 billion yuan ($984.33 million) in July, signaling an end to the regulatory crackdown.

Also Read: China Signals An End To Regulatory Crackdown On Ant Group

With a 33% stake in Ant Group, Alibaba exhibited confidence in Ant, likely to encourage other investors to take the long-term view, SCMP cites Louis Tse Ming-kwong, managing director of Wealthy Securities in Hong Kong. 

Ant eyes listing ambitions, while China's government has supported privately owned enterprises.

A shareholders meeting on Sunday approved Ant Group's plan to buy back up to 7.6% of its equity interest from investors. 

The proposed buy-back would have valued the operator of the Alipay cashless payment service at about 567.1 billion yuan, a slump of almost 70% from the $280 billion market capitalization in 2020 just before the government dumped Ant Group's initial public offerings (IPO).

Tse supported the lower valuation citing that a successful listing will be necessary for raising funds to support Ant's growth.

Separate reports indicated that amid its organizational restructuring, Alibaba looked to overhaul its internal employee ranking system by adding more layers, prolonging the promotion timeline of mid-level personnel, and removing the P9 and above categories for senior roles.

The P9 employee, typically referred to as a "senior expert," with an annual salary package plus stock options that could reach 3 million yuan ($418,000), comprised 1% - 2% of its workforce, SCMP cites familiar sources.

The move is likely to motivate senior employees to continue contributing, instead of resting on their laurels, according to Max Xiao Mafeng, co-founder and partner at recruitment agency TTC Consultancy. 

He said the changes could incentivize lower-ranked employees to get promoted.

In June. Alibaba disclosed that co-founder Eddie Yongming Wu will take over as CEO in the autumn, while the group's vice-chair Joe Tsai will step up as chair.

Price Action: BABA shares traded higher by 0.21% at $92.36 premarket on the last check Monday.