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Activist investor Ryan Cohen has amassed a stake worth hundreds of millions of dollars in Alibaba Group (NYSE:BABA) and wants the company to pursue more share buybacks.
Cohen, the Chairman of GameStop (GME) and founder of online pet retailer Chewy (CHWY), accumulated the stake in the second half of last year, according to a WSJ report, which cited people familiar. Cohen contacted Alibaba (BABA) in August to express his belief that the Chinese e-commerce behemoth’s shares were very undervalued.
Cohen has gained fame in recent years, especially for his stake in GameStop, specifically among meme-stock traders. News of Cohen’s stake in Bed Bath & Beyond (BBBY) in March originally sent its shares soaring 34% on March 6 and a disclosure that he had exited his stake sent the stock plunging 41% on Aug. 19.
Cohen, who wants to have a collaborative relationship with Alibaba (BABA), believes the company can achieve “double-digit” sales growth and almost 20% growth in free cash flow over the next five years, according to the WSJ. Alibaba has a market cap of about $310 billion.
In November Alibaba (BABA) announced that its board approved a plan to upsize its share program by another $15 billion to a total of $40 billion and extend the program to the end of fiscal year 2025.
Cohen has told Alibaba’s (BABA) board that it could further increase its repurchase plan by another $20 billion to a total of $60 billion, according to the WSJ report. Cohen, who also has a decent-sized stake in Apple (AAPL) as well as stake in Netflix (NFLX), is to have a net worth of about $2.5 billion, according to a WSJ report from November.
Also see from earlier Monday Seeking Alpha contributor Daniel Giron’s piece entitled “Why Alibaba Is Well-Positioned For Continued Success.”
Image and article originally from seekingalpha.com. Read the original article here.