Is BABA Finally A Buy?

February 22, 2024

Alibaba offices (credit: Windmemories)

Shares of Alibaba (BABA) could be on the verge of a reversal after being stuck in a downtrend since reaching an all-time high of $319 in late October 2020. Just days prior to that all-time high, Jack Ma took to a Shanghai finance summit to lambaste China's regulatory system, accusing it of inhibiting innovation. And just 2 months later, China's market regulator was in the throes of investigating Alibaba, alleging it was operating under monopolistic practives, ultimately leading to the demise of the planned November 2020 IPO of Ma's fintech operation, Ant, and a hefty $2.8B fine in April 2021.

BABA rebounded from a multi-year low of $57 in 2020 to $121 in January 2023, ahead of the highly anticipated spinoff of Alibaba's cloud business last March. But the company cancelled those plans, which sent BABA tumbling 35% over the subsequent 2 months. Then in November, regulatory filings revealed Ma's plans to sell 10B shares worth $870M, sending prices down another 20% to $67 last month, although Ma ultimately decided not to cut his stake.

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