r/baba
Y’all looking at this the wrong way.
BABA's low price boosts buybacks, could deliver a 10x dividend increase over the next decade via earnings growth and higher payouts.
- Depressed share price makes massive cash pile more effective for retiring shares via buybacks.
- Modest 7% annualized earnings growth could double net income over the next decade.
- Expanding dividend payout ratio from 17% to 50% as capex needs decrease could triple distributed cash.
Everyone in here being a bunch of little babies please sell BABA and go to a casino because I’m sick of your whining.
For long-term investors, this price drop is exactly what we want. Why? Because a depressed share price means management's massive cash pile retires significantly more shares.
If you hold through the noise, here is the realistic math on how Alibaba could deliver a 10x higher dividend per share over the next decade even if the stock price never rises from today.
- Modest Earnings Growth (The 2x Multiplier)
We don't need a return to the growth days of the 2010s to make this work. If Alibaba can manage a totally reasonable \~7% annualized earnings growth over the next decade as cloud and core commerce cash flows stabilize, net income will roughly double.
- Payout Ratio Expansion (The 3x Multiplier)
Right now, Alibaba's dividend payout ratio is incredibly conservativte, right around 17%. As the company fully transitions into a mature cash cow requiring less aggressive capital expenditure, returning a larger chunk of free cash flow to shareholders is the natural next step. If they simply expand the payout ratio from 17% to 50%, that roughly triples the amount of cash they distribute.
- Continued Buybacks (The 1.67x Multiplier)
This is where the cheap stock price supercharges your returns. Alibaba has been aggressively buying back stock, and at these compressed valuations, every buyback dollar goes much further. If they shrink the outstanding float by roughly 4% to 5% a year over the next decade, the total share count will drop by about 40%. When you divide that larger dividend pool by 40% fewer shares, your slice of the pie grows by 1.67x.
When you stack these on top of each other, the compounding does the heavy lifting for you:
2 (Earnings Growth) × 3 (Payout Ratio) × 1.67 (Fewer Shares) = \~10x Dividend Per Share.
A lower price today isn't a disaster, it just means the current buybacks pack a heavier punch, dramatically accelerating your future yield on cost. Let management eat up the float at a discount while the compounding quietly does its job.
how do you know baba is buyins back stock ? They did not buy much in q1, and on HK exchange they have to report if they are buying back, like for example tencent reports it everyday that they buy back shares. But baba is not reporting anything. Ofc they might just be buying on the US exchange where they would not have to report it but the question is. How do you know that they are buying on US exchange ?
How are they crying? It’s a good question. I suppose you’re attacking because you can’t answer it.
The remaining amount of board authorization for Alibaba's share repurchase program was US$19.1 billion.
This program is authorized through March 2027.
Here is your special bottle for special babies who can’t read 🍼.
Bag holder cope
LOL
It’s not a shame to admit Chinese stocks dual listed on US and HK are uninvestable. It’s not BABA fault. Or not BIDU, JD fault.
Problem is they aren’t buying back shares.
🤣🤣
Reasonable point -> your immature outburst
The remaining amount of board authorization for Alibaba's share repurchase program was US$19.1 billion at last report.
This program is authorized through March 2027.
Here is your special bottle for special babies who can’t read 🍼.
Why is it weird to support China? Why do you assume everyone is American?
Only 2.5% of my portfolio but dropping 40% since high last year is something. lol.
Like I have always said, diversity unless you have the conviction in the stock. If you do, why complain?
You are one of the few wearing big boy pants, here is your beer 🍺.
Facts
True. You are not a cry baby so here is your beer 🍺
Alibaba should easily grow revenues 10% per year. Mainly, by expanding to the global markets and more cloud users. However, the problem of Chinese stocks is random regulation, obscure management decisions and guidance (they are limited by the government). For example, there was an earthquake and they had to donate, or donate their quantum computing team to China. This is why a discount must be.
I think PEG of 1 is the discounted fair value. BABA should return higher yield because of the risks, as one fine and the FCF yield drops. if we discount PEG of 1 with some blended pe and growth of the sum of parts, I get around 85$ enterprise value. Adding cash and it is 117$ per share. It is part of wide market discount of Chinese equities that are "too global" and not in the bright side of the CCP. the resolution is lower PEG and higher FCF yield, that usually Chinese companies fail over and over to deliver to shareholders, due to the structural problems of "efficiency" "layoffs" and so on to the Chinese economy, so the CCP basically will stop liquidation and dividends many times (don't forget the 15% fine for moving RMBs to USD, so the net cash is often discounted).
pe can go to as low as 1 for all the market cares. because its chynnnnaaa no one wants to touch it
You are one of the few in this sub wearing big boy pants, here is your beer 🍺.
Oh … and perhaps you have heard of the saying “mature enough to occasionally act childishly”.
I can understand the whining but sometimes the words they used are really too much. Always ask ourselves why we invest in BABA first. Its because we understand they are a profitable company with good fundamentals. Yes the price drop will eat into your margins or it may mentally affect some of you. I will advise as long as you hold you will reap the rewards.
I sold most around $160, thankfully. And bought some JD which is same dead fish.
I hold Luckin Cofee which was a very good performer , but will sell all if we get a pump this summer. Never buying Chinese stocks. Maybe in 2050 we will see fair value but maybe never with CCP
I don’t think anyone here actually read my post. It’s clear to me you are all gamblers not investors.
Here have a bottle 🍼
You devote so much time and energy on something worth 1% of your portfolio?
lol, you are all just gamblers
Are you mentally there? What does my question have to do with gambling? Do you seriously devote this much energy to 1% of your portfolio?
Nothing you’ve said makes any sense. How do you know how much time I spend on any one company? Why does the percentage of holding matter? Allocations can change and I often spend more time evaluating companies I don’t even have a position in.
Here is your special bottle for special gambling addict babies 🍼
\>Are you mentally there?
Perhaps you should ask yourself this question.
I am your mama.
Now, imagine if you invested that money in US tech stocks or even ETF.
This attitude always loses money over a lifetime.
Chasing price-action and looking at where a ticker symbol went retroactively is a fools errand because it makes you chase hype and not fundamentals.