Alibaba initially expected the growth of its overseas marketplaces — which include Lazada in Southeast Asia, Trendyol in Turkey, and AliExpress for cross-border sales — to offset the slower growth of its Chinese marketplaces. That growth rate was unimpressive compared to the segment’s double-digit revenue growth in previous years, but it represented a slight acceleration from its 7% year-over-year growth in the third quarter. That slight improvement seemed to impress investors, even though its rival JD.com (JD -0.21%) recently turned in a much stronger quarterly report that featured 18% year-over-year revenue growth. Alibaba didn’t provide any fresh guidance, which suggests its previous target for full-fiscal-year revenue growth in the 20% to 23% range remains intact.
- With Capital.com’s streaming Alibaba stock chart, you can quickly view the price of BABA stock in real time, and also trace the company’s share value in historic terms.
- CFDs are traded on margin, which means that a trader can open larger positions with their capital.
- It is one of the largest retailers and e-commerce providers, which is also involved in internet and artificial intelligence technologies.
- Worse, its crown jewel, the Chinese e-commerce business, reported a 1% decline in revenue for that year.
But everything changed in the last two years as the company faced a series of challenges, including a crackdown by the Chinese government, a COVID-19-induced slowdown, and competition from Pinduoduo and Douying. Alibaba is hoping that its dual-listing plans might help the company overcome its failed attempt at US domination.Alibaba is hoping that its dual-listing plans might help the company overcome its failed attempt at US domination. Alibaba is confirming its commitment to a US listing despite regulators putting the company on their watchlist.Alibaba is confirming its commitment to a US listing despite regulators putting the company on their watchlist. One aspect of the business, its cloud computing unit, will however let go of around 7% of its staff.One aspect of the business, its cloud computing unit, will however let go of around 7% of its staff. Meanwhile, the logistics arm, Cainiao, is advancing towards a separate initial public offering in Hong Kong, which aims to raise over $1 billion.
About Alibaba Group Holdings Ltd.
Alibaba’s growth rates were tepid, but investors had set a low bar for the tech giant following four straight quarters of disappointing growth. Its stock price had also declined more than 55% over the past 12 months, and it was only trading at about 13 times forward earnings. On a generally accepted accounting principles (GAAP) basis, Alibaba generates all of its profits from its Chinese commerce division.
This move reflects Dai’s shift of focus solely on Alibaba’s primary e-commerce operations. The value of shares and ETFs bought through a share dealing account can fall as well as rise, which could mean getting back less than you originally put in. When it comes to finding liquid, blue-chip stocks from China, it’s hard to choose a more prominent name than Alibaba Group.
It all began with a small B2B marketplace, launched by Jack Ma and 17 of his closest friends. Later the same year, the company got its first large investments from Goldman Sachs (GS) and SoftBank who invested $5 and $20 million respectively. Alternatively, they can trade a contract for difference (CFD) on a particular stock, and speculate on the price difference of the underlying forex broker bonus asset, without actually owning the asset. A CFD is a financial contract, typically between a broker and an investor, where one party agrees to pay the other the difference in the value of a security, between the opening and closing of the trade. You can either hold a long position (speculating that the price will rise) or a short position (speculating that the price will fall).
- It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988.
- It also owns a third of Ant Group, which controls AliPay — one of the two largest digital payments in China alongside Tencent’s (TCEHY -0.57%) WeChat Pay.
- Alibaba already faces tough near-term challenges, and the delisting fears merely raise additional red flags for its beaten-down stock.
- It then swung back and forth, with the price of BABA shares falling as low as $132 in December 2018 and rising to its all-time high of $228.66 in January 2020.
- Alibaba’s result for the fiscal year ended March 31, 2023 reflected these challenges when revenue grew by just 2%.
The BABA stock has proved to be a big winner since its public launch on the NYSE in 2014. He is now worth an estimated $22bn through his 7.3% stake in Alibaba, according to Bloomberg. That was exactly what Alibaba’s founder, Jack Ma, did to celebrate the company’s 10th anniversary. But it is Alibaba’s lucrative business football stocks model that has got many investors excited. As the company simply connects customers and businesses charging only a small commission, it does not need huge amounts of infrastructure to make the system work. And the good news for Alibaba is that consumers are increasingly choosing to shop with their phones.
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Therefore, it’s impossible to recommend buying this Chinese tech stock right now when so many other high-quality American tech stocks are still on sale. That change, which could be approved by the end of this year, could minimize the impact of a full delisting in New York. Alibaba’s cloud revenue rose 12% year over year to 18.97 billion yuan ($2.99 billion), or 9% of its top line, during the fourth quarter. That represented a deceleration from its 20% growth in the previous quarter.
Even with foreign companies that plan to hold a majority of shares, the share class structure offers an opportunity to raise capital without giving away significant power to the new shareholders. Many believe that Alibaba’s U.S. IPO allowed founder Jack Ma to maintain control of the company. Alibaba’s pre-IPO structure gave Ma and co-founder Joseph Tsai control of the company despite not owning a significant percentage of shares. Ma’s reported first choice of exchanges, Hong Kong, frowns on control methods that aren’t based on majority ownership. Alibaba’s cloud growth also cooled as China’s regulators cracked down on online games, streaming video platforms, online education services, and other internet-based apps, which had flourished during the pandemic.
Alibaba’s challenges in recent times have caused investors to be pessimistic about its future. Understandably, the stock trades at a low valuation with the stock trading at a price-to-sales (P/S) ratio of 1.8, significantly lower than its five-year average of 5.5. While still in the early days, the recent performance indicated that Alibaba’s strategic restructuring effort of breaking its empire into six major units was bearing fruit. For instance, all six divisions — in addition to reporting solid revenue growth — reported notable improvements in profitability. In particular, Cainiao Logistic and Digital Media and Entertainment Group turned around their loss-making business in the latest quarter.
Nio’s, Alibaba’s stocks get a boost from China’s cyberspace regulator
A single quarter of good performance is probably too early to declare victory. Fortunately, with the strategic restructuring plan, Alibaba has a clear plan for a full recovery. Investors should also note any recent changes to analyst estimates for Alibaba. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook. BABA’s full-year Zacks Consensus Estimates are calling for earnings of $9.13 per share and revenue of $133.89 billion.
CFDs are traded on margin, which means that a trader can open larger positions with their capital. This gives you plenty of time to monitor the company’s activity and keep an eye out for any events that may affect short-term movements in the Alibaba stock value. Alibaba stock is listed on the New York Stock Exchange (NYSE) under the ticker symbol BABA and the Hong Kong Stock Exchange (SEHK) under the ticker 9988. “Investors may be concerned that the timing and process of AliCloud’s spin-off may be affected,” she explained. However, she maintained a “buy” rating on Alibaba’s stock and a target price of $151 — that’s 67% higher that the stock’s last close of $90.05 on the New York Stock exchange. The surprise announcement will weigh on Alibaba’s share price in the near term until a new successor is named, Citi analyst Alicia Yap said in note on Monday.
However, China’s antitrust regulators cracked down on Alibaba’s e-commerce business and slapped it with a record $2.8 billion fine in April 2021. It was also barred from locking in merchants with exclusive deals and random walk hypothesis using excessive promotions. But could Alibaba be worth buying as that news weighs down its stock price — which has already fallen more than 70% since hitting its all-time high of $317.14 per share in October 2020?
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Even the flagship Chinese e-commerce division reported a 12% increase in revenue. In September 2014, Alibaba debuted in New York and was listed on the NYSE under the ticker symbol BABA. The Alibaba stock was priced at $68 per share and the company raised an unprecedented amount of $25 billion, which marked the biggest IPO of that time.
Who are Alibaba’s main competitors?
With Capital.com’s streaming Alibaba stock chart, you can quickly view the price of BABA stock in real time, and also trace the company’s share value in historic terms. Alibaba popularized Singles day as the world’s biggest shopping holiday. The Chinese holiday is now the largest single day for global online sales each year, and brings in significant revenues for the company. In May, Alibaba also announced plans to spin off its cloud division as a separate, publicly traded company. Revenue for all of these marketplaces comes from fees and a percentage paid on each sale. On this measure, Alibaba’s performance still lags behind the two other e-commerce giants.
E-commerce and retail service platforms
Having U.S. dollar shares on a U.S. exchange can simplify any future acquisitions of U.S. businesses and can lessen the scrutiny these deals might face if a foreign listed company made an offer for a U.S. listed business. That slowdown was partly offset by the 18% growth of Alibaba’s international commerce business, which includes its Southeast Asian marketplace Lazada, the Turkish marketplace Trendyol, and the cross-border marketplace AliExpress. However, that also represented a deceleration from the segment’s 34% growth in the previous quarter. Within the commerce segment, Alibaba’s Chinese commerce revenues — which mainly come from its Taobao, Tmall, and wholesale marketplaces — grew by just 7%, compared to its 32% growth in fiscal Q2. Alibaba’s growth from a start-up employing 18 people in 1999 to a worldwide company employing 22,000 is down to its ability to harness the world of internet commerce. As China’s largest e-commerce and cloud platform company, Alibaba seemed like a solid long-term investment.
The increased scrutiny and transparency SEC oversight provides is seen as a plus by investors, who subsequently have more trust when reading a company’s financials and making their investments. Not only is there an element of prestige in being an NYSE-listed company, but there is also a very practical advantage. Companies that trade publicly in the U.S. fall under the regulatory supervision of the Securities and Exchange Commission (SEC). Alibaba’s market capitalization on March 31, 2022, approached almost $300 billion. Alibaba already faces tough near-term challenges, and the delisting fears merely raise additional red flags for its beaten-down stock.
China now has over 600 million internet users, out of a population of 1.3 billion people. Get this delivered to your inbox, and more info about our products and services. Let’s review its previous challenges, its current growth rates, and its valuations to decide. The mediocre growth wasn’t surprising since management had already reduced its fiscal year guidance in November. It mainly attributed the slowdown to macroeconomic headwinds, intense competition, and tighter government regulations.