Alibaba news concerning the company’s new investment in a Chinese courier has BABA stock up on Monday.
Alibaba (NYSE:BABA) is making a $693 million investment in the Chinese courier company STO Express Co Ltd. This will actually have BABA investing in a new subsidiary of the shipping company.
This new subsidiary of STO Express will hold a 29.9% stake in the company. The Alibaba news about its investment in the company is that it is taking out a 49% stake in this subsidiary. This will in turn give it a 14% stake in the parent company.
The Alibaba news concerning its investment into STO Express marks the fourth time that the company has made a major investment in a Chinese courier company. BABA is making these investments as part of its efforts to speed up deliveries in the country.
“We will deepen our existing collaboration with STO in technology, last-mile delivery across China and New Retail logistics,” Alibaba said in a statement to Reuters.”This investment is a step forward in our pursuit of the goal of 24-hour-delivery anywhere in China and 72 hours globally.”
Deyin Investment will continue to remain the main shareholder in STO Express even after the Alibaba investment. It will own the remaining stake in the subsidiary, a direct 7.76% stake in the company, as well as the entirety of a stake in a second subsidiary worth 16.10%.
BABA stock was up 3% as of Monday afternoon and is up 28% since the start of the year.
As of this writing, William White did not hold a position in any of the aforementioned securities.
