Alibaba Group Holdings Ltd.

Alibaba Group Holdings Ltd. NYSE
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Sep 142021

Alibaba kicks self-drive up a gear

Alibaba gets involved in Chinese autonomous driving start-up in a big way, leading investments of $300 million in its latest funding round., a Chinese autonomous driving start-up, has just raised around $300 million in its B-round of financing, which was led by Alibaba. The move underlines Alibaba’s interest in getting involved in the burgeoning driverless car market (which is looking more and more like the future of mobility) having already invested in Tesla rival XPeng (XPEV) and auto-driving start-up AutoX.

Prices still ended Monday down 1.36% though, after dropping 3% in the first few hours of trading on the back of news that Chinese regulators are considering breaking up Alibaba’s payments segment, Alipay.
Brock Wegner / Unsplash
Sep 082021

Alibaba gets a bump up

Alibaba gets a lift of just under 3% and rallies in Hong Kong trading after Tencent boosts market sentiment with a share buyback.

Shares of Alibaba lifted 2.85% on Tuesday as Chinese tech stocks lifted to their highest level in over a month in Hong Kong trading. The rally comes on the back of entertainment giant Tencents’ move to buy back shares worth $12.9 billion, leading traders to pile into the market. Bloomberg Intelligence analyst Matthew Kanterman said:

The lack of more bad regulatory news plus company share repurchases the last few days may be underpinning a continued shift in investor sentiment to being more constructive on China’s tech stocks.
Sep 032021

What about investor prosperity?

Alibaba gets investors worried about an unnecessary outpouring of money with a $15.5 billion pledge to China’s ‘common prosperity’.

E-commerce giant Alibaba is the latest to contribute to a Chinese government push for ‘common prosperity’, with a $15.5 billion pledge towards President Xi Jinping’s goal to spread wealth. The donation comes amid a broader Chinese crackdown on the tech industry, so perhaps the move was made in part to curry favor with regulators, but there’s concern that the donation will impact Alibaba’s top and bottom lines – $15.5 billion is equivalent to around two-thirds of its 2020 net income.
Image: Markus Winkler / Unsplash
Aug 272021

Alibaba gets a finger wag

A local Chinese telecoms regulator says Alibaba Cloud must make rectifications after its 2019 data leak.

Alibaba’s cloud computing unit has come under fire after breaking China’s cybersecurity laws with its 2019 data leak, and now regulators are demanding rectifications. After following up on a complaint, it was found that the cloud company had illegally released user registration information to a third party partner without asking for consent first. Alibaba said one single telemarketing employee had leaked the information, and that the matter had been dealt with internally. However, in accordance with China’s new Personal Information Protection Law, which takes effect in November, the company must now take corrective measures. Making rectifications is one of the lightest penalties the company can get under the law, and such data leaks could mean a fine of up to 1 million yuan or even revoking a business license.

Alibaba Cloud currently controls over 40% of the cloud market in China.
Aug 252021

Alibaba sees the beginning of recovery

Chinese tech stocks spend Tuesday on the rebound, regaining some of its regulatory-induced losses and getting some love from the online army, sending Alibaba up over 6% on Tuesday.

Shares of U.S. listed Chinese e-commerce giant Alibaba saw its shares lift over 6% in Tuesday trading as the Chinese tech market began to recover from its lashing earlier earlier this month from Chinese regulators. China’s tech giants have seen billions wiped off their market value recently, promoted by a tightening of regulatory controls in the region, which have included quick and powerful laws and punishments. Together with fellow e-commerce platforms (JD) and Pinduoduo (PDD), the group gained over $65 billion in market value on the U.S. market during Tuesday trading. The gains were boosted by a good day on the meme mania market, with Alibaba stock holding the fourth most mentioned spot on Reddit’s WallStreetBets.

The news comes despite fresh disclosure requirements from the U.S. Securities and Exchange Commission (SEC) that aim to increase the transparency of foreign companies listed in the U.S. The regulator is looking to increase investor awareness, requiring much more detailed disclosures from companies before they are able to apply for an IPO. Chinese regulators aren't likely to want any more detail handed over, so there is potential that the rules will cause fresh controversy.

For now though, Alibaba investors don’t seem too fussed, with the stock ending the day up 6.61% at $171.70
Aug 232021

A spending frenzy

Despite a whole bunch of recent regulatory setbacks, U.S. listed Chinese stocks on Monday saw the largest amount of buying in five years.

Even in the face of a continuing Chinese crackdown on U.S. listed Chinese stocks, retail investors continue to pile into the market, and Monday’s session saw net purchases of U.S. stocks of Chinese companies surpass $400 million. Chinese companies have raised millions of dollars through U.S. IPOs, but Chinese financial watchdogs continue to impose harsh sanctions and fines on those that have managed dual citizenship. Alibaba was the most bought stock in the U.S. market on Monday, with more than double the amount of purchases that newly FDA approved Pfizer saw. Giacomo Pierantoni, an analyst at Vanda Research, said of the activity:

The most important singularity of retail purchases of ADRs is that they weren't contrarian. Since the regulatory crackdown started, retail investors increased their buying on dips, providing liquidity to institutional investors who were exiting long positions.
Aug 202021

Alibaba investors feel the pain

Alibaba continued its China-crackdown fuelled losses, reaching its lowest price in two years and wiping $1.4 billion off the shares of ten key investors.

Shares of e-commerce giant Alibaba have been tumbling since Tuesday, reaching their lowest levels since 2019 on the back of fresh new antitrust rules out of China, which took a chunk of a number of the region’s biggest tech companies. As investors have continued to dump the stock, prices have continued to fall, reaching a two-year low of $159.51 on Thursday. The decline has seen 10 key investors – including Ray Delio, Charlie Munger and Cathie Wood – possibly lose as much a combined $1.4 billion from their Alibaba holdings. Ouch.
Aug 182021

Alibaba sinks to another low

Alibaba closes Tuesday at its lowest price since October 2019, down just under 5% as another Chinese crackdown leaves its mark.

Shares of e-commerce giant Alibaba ended Tuesday at its lowest closing price since October 2019, skimming lows of $181.51 before closing down just under 5% at $173.73. The losses come on the back of fresh new antitrust rules out of China on Tuesday morning, which took a chunk of a number of the region’s biggest tech companies.
Aug 172021

Chinese watchdogs take another bite out of tech stocks

China is back at it with those regulatory crackdowns, sending Alibaba down in pre-market trading with fresh new antitrust rules.

Chinese tech stocks suffer on Tuesday morning after China continues its crackdown with a new set of rules aimed at curing unfair internet competition. The State Administration for Market Regulation released the draft rules, which cover a variety of restrictions like fake product reviews and how companies are able to use consumers' data. The market regulator has already come after a bunch of internet companies, including Alibaba, for abusing their market dominance, taking billions off the Chinese tech market.

The regulator is leaving the rules open to public review before they take effect on September 15. Alibaba dropped 2.5% in Hong Kong morning trading.
Aug 052021

Buyback program rescues disappointing results

Chinese e-commerce giant Alibaba releases a mixed bag of fiscal first quarter earnings, beating earning expectations but reporting revenue below what analysts were hoping for. Shares closed Tuesday down 1.36% but made up for those losses on Wednesday.

China’s original e-commerce behemoth, Alibaba, reported mixed earnings for its quarter ended in June, sending the stock dropping this week after the company missed revenue expectations. Alibaba reported earnings per share of 16.60 yuan ($2.56) on revenues of 205.74 billion yuan ($31.83 billion), compared to expectations of 14.43 yuan ($2.23) on revenue of 209.29 billion yuan ($31.83 billion). Revenue was up 34% from the same period the year before, and net income came in below last year's numbers at 45.1 billion yuan ($7 billion). Alibaba’s core commerce revenue lifted around 35% to 180.24 billion yuan, but that was still below expectations of 184.23 billion yuan.

The poor results come at a particularly bad time for Alibaba, which is still being targeted by the ongoing Chinese regulatory crackdown. Regulators slammed the company with a $2.8 billion anti-monopoly fine in April, and last year halted the $37 billion IPO of its affiliate Ant Group – an affiliation that earned the company a profit of 4.49 billion yuan in its first fiscal quarter.

We are in the process of studying the regulatory requirements, evaluating the potential impacts on our relevant businesses and we will respond positively with actions. We believe in the growth of the Chinese economy and long-term value creation of Alibaba. We will continue to strengthen our technology advantage in improving the consumer experience and helping our enterprise customers to accomplish successful digital transformations,

said CEO Daniel Zhang about the regulatory wars.

The chinese e-commerce business tried to make up for its underwhelming numbers by increasing its share buyback program by 50%, from $10 billion to $15 billion – the largest in its corporate history. That wasn't quite enough to woo investors, it seems, and prices ended Tuesday down 1.35%. The stock regained some ground yesterday, though, so not too much damage was done. Alibaba closed at $200 on Wednesday. However, before Ant Group’s IPO was cancelled, prices were trading at well above the $300 mark.
Jul 282021

Alibaba nurses regulatory bites

Alibaba sinks to its lowest price since May 2020, down 10% this week as its affiliate, Ant Group, endures growing pressure from Chinese regulators.

China has been on the warpath against its U.S.-listed stocks, and though it may seem like Alibaba has paid its dues with its $2.8 billion antitrust fine in April, the financial watchdogs aren't done yet. The stock closed down 7% on Monday, its lowest price since May 2020, after mounting pressures against some of the country’s biggest tech companies.

There are a couple of factors at play here.

The first is that one of Alibaba’s affiliates, Ant Group, is in talks with the Chinese government over sharing customer data for a new credit-scoring system. If the talks go to the next stage, Alipay would give up control of some of its users’ data, which Chinese state-run enterprises would all have easy access to – which raises some questionable implications around the privacy of the 1 billion users that make use of Ant’s Alipay and its financial services.

Shares of Alibaba also suffered on the back of news that Tencent and Alibaba are under pressure from the Chinese government to create a new state-backed digital currency to be called the electronic Chinese yuan (e-CNY). The new crypto would be in competition with Alipay’s existing digital payments network, and might pose a risk to the the platform’s impressive user base. Alibaba is likely to participate in the development of the digital currency either way, rather than risk being left out of the loop.

For Ant and Tencent, it's risky to encourage the development of e-CNY, but it's even more risky to stay on the sidelines. (Hopefully) by cooperating with the government, it might at least gain some influence and try to guide the design (of the digital yuan) in ways that won't reduce their competitive advantages too much,

said the former head of the International Monetary Fund's China division, Eswar Prasad.

Prices closed down a further 3% on Tuesday
Apr 102021

Alibaba faces a crackdown

Alibaba gets slapped with a $2.8 billion fine, but investors don't care and the stock shoots up just under 10% to close at its highest price since February 24 🤷‍♀️

Chinese regulators hit Alibaba with the fine following an anti-monopoly probe that reported the company had abused its market dominance, and the company will now have to ensure “comprehensive rectifications” take place. Reports surfaced in December 2019 that China’s State Administration for Market Regulation had opened an investigation into Alibaba over monopolistic practices, which sent stock down over 13%, making the latest price bump extra curious.

The accusation is that Alibaba used the technicalities of its platform to force merchants to pick one of two platforms, instead of being able to work with both, which restricts competition and shuts out other businesses. The probe resulted in a fine of about 4% of Alibaba’s 2019 domestic revenues. It’s the latest incidence of Beijing cracking down on internet giants after years of taking a fairly relaxed approach towards online, e-commerce and digital-finance spheres. But no longer. The burst of scrutiny on companies like Alibaba and Tencent is now one of the largest concerted actions against private enterprise in decades. Ali Baba founder Jack Ma’s financial arm Ant Group also faces having its valuation slashed by over two thirds amid new measures introduced in January to curb market concentration; and Tencent’s growing FinTech segment faces a real threat.

China’s record fine on Alibaba may lift the regulatory overhang that has weighed on the company since the start of an anti-monopoly probe in late December,

Bloomberg Intelligence analysts Vey-Sern Ling and Tiffany Tam said.