Alibaba is expected to continue to grow its number of merchants, brands, and enterprise customers for its cloud platform. If that worst-case scenario happens, Alibaba would likely allow its U.S. investors to trade their ADR shares for Hong Kong shares. However, investors would need to be using a brokerage that has access to the Hong Kong Stock Exchange, and pay some fees for the trade. The stock might also be allowed to temporarily shift to an OTC exchange until the transfer is completed. To show that the countdown timer has already started, the SEC has been expanding a list (which now includes over 270 Chinese companies) of delisting candidates.
Since its IPO, Alibaba experienced tremendous success throughout most of 2020. However, after topping $300/share in October 2020, Alibaba shares have tumbled to below $87 in March 2022. Regardless of the recent performance of Alibaba’s stock price, when foreign companies list on U.S. exchanges, money is generated for the exchanges and investment scalping strategy forex banks involved. This makes it a win not just for the foreign company but for the U.S. as well. Investors should take those estimates with a grain of salt, but they do imply that Alibaba’s margins could gradually stabilize over the next few quarters as it scales up its higher-growth cloud and international commerce businesses.
Alibaba’s valuation looks relatively cheap, especially for a leading technology company that still owns some of the best businesses in China. Alibaba will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.15, up 18.13% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $31.68 billion, up 8.78% from the year-ago period.
- Zhang was Alibaba Group CEO since 2015 and the group chairman since 2019.
- Alibaba was once considered one of the safest Chinese tech stocks to own.
- Fortunately, with the strategic restructuring plan, Alibaba has a clear plan for a full recovery.
- Investors should take those estimates with a grain of salt, but they do imply that Alibaba’s margins could gradually stabilize over the next few quarters as it scales up its higher-growth cloud and international commerce businesses.
However, analysts expect its revenue to rise by just 19% this year, and anticipate its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) will decline by 19%. In fiscal 2023, they expect its revenue will rise by 18%, and its adjusted EBITDA will improve by 19%. That pressure will make it more difficult for Alibaba to expand its digital ecosystem.
Just sign up at Capital.com and use our advanced web platform or download the best-in-class investment app to trade on the go. It will take you just 3 minutes to get started and access the world’s most traded markets. Alibaba group was launched in 1999 and has grown from a standalone B2B e-commerce portal to the leading e-commerce provider in Asia. Its C2C marketplace Taobao and B2C retail platform Tmall are key players in their respective markets. The initial public offering was the largest ever offering at the time, with the company’s market cap reaching $231 billion.
- He is now worth an estimated $22bn through his 7.3% stake in Alibaba, according to Bloomberg.
- 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.
- 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.
- Alibaba, holding a 70% stake in Cainiao, is spinning off the logistics network as part of a broader restructuring initiative.
- 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.
By that time Alibaba proved to be the world’s largest online e-commerce platform for small businesses. Today, Alibaba is ranked among the top 10 most valuable companies globally. Alibaba Group Holding Limited is a Chinese multinational corporation, specialising in e-commerce, retail, technology and artificial intelligence solutions. The leading e-commerce provider in China and abroad, Alibaba offers a broad range of B2B, B2C and C2C e-commerce, mobile payment and logistics services. The company also operates cloud infrastructure services and the most popular Chinese online video site Youku Tudou. Alibaba’s (BABA -0.24%) stock price plunged 11% on July 29 after the U.S.
Alibaba Group Holding Ltd. ADR falls Thursday, underperforms market
Under the HFCAA, Chinese companies that don’t comply with those tighter auditing standards for three consecutive years will be delisted from all U.S. exchanges, including over-the-counter (OTC) ones. China’s Securities Regulatory Commission (CSRC) subsequently held talks with the SEC to prevent those delistings, but those discussions have been fruitless thus far. Unless Alibaba stabilizes its near-term growth, provides more concrete guidance for the rest of the year, and clears out all the regulatory obstacles, I think investors should stay far away from its volatile stock. An unnamed “top customer in the internet industry” — most likely TikTok’s parent company ByteDance — also stopped using its overseas cloud services over the past year. It also said the COVID-related shutdowns had delayed the completion of several hybrid cloud projects. But during the fourth quarter, Lazada’s growth in order volumes decelerated, while higher taxes in Europe caused AliExpress’ order volumes to drop year over year.
As its financial performance deteriorated, Alibaba’s stock price fell to lows unseen in recent years. Jack Ma and 17 others founded Alibaba’s online marketplace in 1999, and achieved profitability for the first time in 2001. A U.S. listing also allows companies like Alibaba a bit more range of motion when it comes to mergers and acquisitions (M&A).
The next day Alibaba started the trading session on the New York Stock Exchange with the opening price of $92.70. In June 2015, Alibaba started a joint venture Koubei with its affiliate Ant Financial Group to tap China’s fast-growing local services market, each investing approximately US$483 million into the business for an equal equity stake. The NYSE and the U.S. generally allow companies to use share classes to maintain control of publicly traded companies.
Alibaba Group Holding Ltd. ADR
Meanwhile, China’s broader economic slowdown caused Alibaba’s enterprise customers to curb their spending on cloud services. It also expects its ongoing shift toward direct sales — which would make it more similar to JD.com — to keep squeezing its margins. First, Chinese regulators hit Alibaba with a record antitrust fine, passed new restrictions against its e-commerce business, and scuttled Ant Group’s long-awaited IPO. Second, Alibaba’s growth decelerated as its e-commerce business faced macro and competitive headwinds. Lastly, delisting threats in the U.S. prompted many investors to shun Chinese equities.
Alibaba is an online platform that connects manufacturers and wholesalers in China to individuals and businesses around the world looking to trade or resell. Users buy products for their business and then use or re-sell them, or sign up to be a supplier looking to use Alibaba as a selling platform. As with any equity, quarterly earnings announcements and the financial performance of the wider stock market are two crucial factors to watch when deciding how Alibaba stock will perform. Alibaba share price history dates back to 2007, when the company first went public on the Hong Kong Stock Exchange in 2007.
Is Alibaba Stock a Buy Now?
The move comes months after Alibaba said in June that Zhang was departing as chairman and CEO of Alibaba Group to focus on the cloud intelligence unit. Online marketplaces often refer to gross merchandise volume (GMV), which measures the value of items sold and therefore it is seen as an indication of the size of their business. According to its latest filing with US regulators, 279 million active buyers and 8.5 million active sellers use Alibaba’s online services every year and 14.5 billion annual orders are made.
Yet, the conglomerate’s revenue has grown 15-fold in this period, from $8.4 billion in to $126 billion in 2023. To this end, the new Chairman and CEO, Eddie Wu, has just assumed his role and put forth a new strategic focus on winning this battle, which is to focus on delighting users and use artificial intelligence to drive business. Concurrent with his appointment was the exit of Daniel Zhang from his role as the chairman and CEO of Alibaba’s cloud division. Clearly, Wu will need time to deliver results as the acting chairman and new CEO of the cloud division.
Alibaba has clarified that these changes are routine business registration adjustments at the subsidiary level and do not impact the broader group structure. Trudy Dai Shan, a prominent figure and early aide to co-founder Jack Ma, has relinquished her roles at several random walk hypothesis Alibaba subsidiaries, including Hangzhou Alimama Software Services Co and Taobao (China) Software Co., SCMP reports. Alibaba has several convenient search features that will help you filter through the selection until you find the perfect product for you.
Alibaba Group Holding’s e-commerce logistics arm has filed an initial prospectus for an initial public offering in Hong Kong. Alibaba, holding a 70% stake in Cainiao, is spinning off the logistics network as part of a broader restructuring initiative. Alibaba Group Holding Limited BABA stock is trading higher on Monday as it is undergoing a significant business transformation, marked by leadership changes within its core e-commerce unit, Taobao and Tmall Group. In 2019, Alibaba got $12.9 billion from its secondary listing on the Hong Kong Stock Exchange, where its shares were priced at HK$176, or $22.5 per share. In the course of its history, the company has made a number of successful acquisitions to diversify and enlarge its business offering and expand the global market present. Some of the most notorious Alibaba’s acquisitions include AutoNavi (2014), the South China Morning Post (2015), Eleme (2018), NetEase’s Koala (2019) and Keruyun (2020).
Securities and Exchange Commission (SEC) added the Chinese tech giant to its list of stocks that could be delisted. Alibaba was once considered one of the safest Chinese tech stocks to own. It operates China’s largest e-commerce marketplaces, Taobao and Tmall, as well as its largest cloud infrastructure platform, Alibaba Cloud. It also owns a third of Ant Group, which controls AliPay — one of the two largest digital payments in China alongside ether trader Tencent’s (TCEHY -0.57%) WeChat Pay. It generated 8% of its revenue from Alibaba Cloud, which is the largest cloud infrastructure platform in China; 3% from its digital media and entertainment segment, and the remaining 1% from its “Innovation Initiatives” division. Alibaba (BABA -0.24%), once a Chinese growth powerhouse, faced a turbulent period as revenue growth fell to an all-time low in the fiscal year ending March 31, 2023.