Can Meme-Stock King Cohen Help BABA Repeat the Feats of GME & BBBY?
On Jan. 17 the media reported that meme-stock king Ryan Cohen bought hundreds of millions of dollars of Alibaba stock in the second half of last year.
Cohen led and profited from two short squeezes of meme stock. When buying the company's stock, he makes customized recommendations for the company and has a strong appeal among retail investors.
Cohen Led GME & BBBY’s Short Squeeze
Ryan Cohen built up a stake in the video game retailer $GameStop(GME)$ between August and December 2020.
His appointment as chair of the company's board in January 2021 triggered a short-squeezeof 1,500% rally within two weeks.
In 2022, Cohen spent seven months building up a 12% stake in $Bed Bath & Beyond(BBBY)$ .
In March when the company was at a low point, Cohen wrote to BBBY's board that the company had to make major strategic changes and offered several suggestions, including divesting less important business segments.
Then he netted a $68 million profit when he dumped the entire stake in two days in August 2022.
Cohen advises Alibaba to follow Apple's lead - expand share buyback program
Cohen bought hundreds of millions of dollars of Alibaba stock in the second half of 2022. He first spoke with Alibaba's board last August to express his desire for a long-term relationship with Alibaba, people familiar with the matter mentioned.
He believes
Alibaba are significantly undervalued and expects the company to be able to deliver double-digit sales growth and nearly 20%free cash flow growth over the next five years.
After initial communications with Cohen, Alibaba announced last November that its board of directors approved an expansion of the company's share repurchase program by $15 billion to $40 billion.
Alibaba shares are up 49% since the November announcement
People familiar with the matter said, Cohen has communicated with Alibaba's board of directors that the share repurchase program could be expanded by another $20 billion to about $60 billion.
Cohen said $Apple(AAPL)$ could be a good example for Alibaba. Since 2012, Apple has bought back hundreds of billions of dollars of stock and its share price has soared.
Stock buybacks can not only support the stock price by reducing stock liquidity and improving U.S. stock profits, but also can release positive signals to investors.
Do you think Alibaba can repeat the feats of GME & BBBY?
Do you look forward to Alibaba's further expansion of repurchase program?
What's your expectation for Cohen's move?
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Moreover, Alibaba’s exisiting share buyback is very huge already.
I duno whats Cohen is thinking haha. He has his own interest.