JD.com proposed special dividend shows it is 'confident' on business prospects, Citi says
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JD.com (NASDAQ:JD) announced that it is considering a special dividend on or around May 4, a development that surprised investors and one that investment firm Citi said shows confidence in its long-term prospects.
Analyst Alicia Yap, who rates JD.com (JD) buy with a $97 price target, noted that the special dividend is both "surprising and positive," but it also shows that the Chinese e-commerce company is positive about its business prospects and ability to generate cash flow.
Yap pointed out that the board of directors of JD.com (JD) raised the amount of its buyback to $3 billion from $2 billion in late December and still has another $2.2 billion buyback program it could execute.
"Since buybacks are usually subject to trading window restrictions and may not see immediate effect, we believe the decision for a special cash dividend likely suggests JDâs management and board are evaluating different ways to return value to shareholders, especially given the current uncertain macro environment," Yap added.
JD.com (JD) shares rose more than 3.5% to $52.54 in premarket trading on Friday. 
Earlier this month, JD.com (JD) appointed Lei Xu, president of JD.com as the CEO of the company, succeeding Richard Liu, though Liu will remain chairman of the board of directors.