Vipshop Plans $500 Million Buyback After Archegos Selloff

(Bloomberg) -- Vipshop Holdings Ltd. announced a $500 million share buyback plan on Tuesday, becoming the second firm to take advantage of lower stock prices after it was caught up in the forced liquidation of Bill Hwang’s Archegos Capital Management.

Vipshop’s shares rose as much as 6.1% in premarket trading after it announced the repurchase plan representing 2.6% of its current market value. It follows in the footsteps of Tencent Music Entertainment, which aims to buy back $1 billion of its shares after both firms were part of $20 billion of block trades on Friday which wiped out $35 billion from the values of bellwether stocks.

The unprecedented selling, which continued on Monday, caused wild swings in the affected companies’ prices and led some analysts to predict that the selloff could be used as an opportunity to buy back shares. Baidu Inc., another name which was subject to the forced selling, has approximately $2.78 billion outstanding share repurchase programs that it could use for buying back its stock, Citi analysts wrote in a note.

Vipshop’s shares have declined almost 11% since last Thursday.

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