Chinese billionaire Jack Ma has cashed in billions of dollars of Alibaba (NYSE:BABA) stock, according to recent headlines. SEC filings reveal that the Alibaba co-founder's stake in the company fell from 6.2% to 4.8% over the last year.

But there's another way to look at this: Ma owned 1.04 billion Alibaba shares on July 2, 2020. A year ago, he only controlled 162 million stubs. From that point of view, Ma's holdings multiplied by 6.4.

The confusion stems from Alibaba's dual listing on the New York Stock Exchange and the Stock Exchange of Hong Kong. Let's see what's really going on with Ma's Alibaba shares.

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Let's split the difference

Alibaba restructured its stock in the fall of 2019. The e-commerce and cloud computing giant prepared to enter the Hong Kong exchange with an 8-for-1 split of its ordinary shares. At the same time, the American depositary shares (ADS) trading on the NYSE changed from representing one original Alibaba share each to -- you guessed it -- 8 shares per ADS. Alibaba said that the stock split would help it raise capital in Hong Kong, and the expanded scope of the NYSE ADSs made the whole thing invisible to American investors. The company also issued 500 million new shares to trade on the Hong Kong exchange, diluting the stock by 2.3%.

That's why Jack Ma's share count multiplied many times over, even if he sold some shares. The shares he held in 2019 are simply counted as eight smaller shares each these days.

More detail

But we're still not done here. Jack Ma divides his Alibaba holdings into several buckets. He holds a small portion of his Alibaba shares directly in his own name, supplemented by five offshore investment vehicles in the Cayman Islands and British Virgin Islands. If you break those holdings down, converting the 2019 stakes into post-split share counts, it turns out that Jack Ma increased his direct Alibaba holdings by 17%. The Cayman interest held steady at 280 million shares and the four funds in the British Virgin Islands sold off 25% of their Alibaba stock.

The filings don't say anything about stock trades or the potential price of any sales or buys, but Alibaba's stock price has oscillated near $200 per ADS over the last year. In other words, Jack Ma added roughly $14 million to his personal Alibaba holdings while the funds controlled by his family pocketed approximately $6.3 billion.

Ma's remaining Alibaba stake is worth $266 billion at today's share prices. That's a pretty solid rainy-day fund for any family.