As new headwinds emerge, BABA shares are once again in the spotlight.
The DIDI crackdown has drawn additional attention to BABA.
Since the ANT Group IPO was canceled in late 2020, BABA shares have struggled.
Alibaba (BABA) is attracting unwanted attention once again, as Chinese stocks are subjected to increased scrutiny by Chinese regulators. This time, DiDi Global (DIDI), a recently IPO’d business, is in the spotlight as China’s Cyberspace Administration investigates the company’s data handling procedures. DIDI’s app has been removed from Chinese app stores, citing revenue losses (see more).
“Once the ‘DiDi Chuxing’ app is removed from Chinese app stores, it can no longer be downloaded in China,” the business stated in a statement. “However, existing users who have previously downloaded and installed the app on their phones before to the takedown may continue to use it.”
This all reminds BABA investors of its ANT Group IPO, which was canceled at the last minute due to China’s fears about the company, which were exacerbated when Jack Ma publicly criticized the Chinese government. The matter hasn’t been settled yet. The Wall Street Journal reported on June 23 that ANT Group was discussing forming a credit scoring company with Chinese state-owned enterprises so that ANT Group’s data would be under Chinese regulatory control. China was once again concerned about the massive amount of data ANT Group would collect on Chinese users, and a similar story is unfolding with DIDI, which also collects massive amounts of user data. In any case, it has frightened investors, with DIDI plummeting roughly 25% in the premarket on Tuesday and most other Chinese stocks falling even if they are not directly affected.
Key figures for Alibaba (BABA).
$592 billion in market capitalization
Price/Earnings\s27\sPrice/Sales
5.7\sPrice/Book\s4
$579 billion in enterprise value
Net Margin: 0.43 Gross Margin: 0.43 Gross Margin: 0.43 Gross Margin: 0.
0.21
Buy $294 based on the average Wall Street rating and price target
BABA had finally broken out of the long-term downtrend line on June 25, however the validity of this break is now being questioned. BABA stock has retraced to the trend line at $215 after breaking the 9 and 21-day moving averages. This is a solid support zone on the volume profile, with the point of control at $213.87, so there is reason to be optimistic. The price at which the greatest amount of volume was traded is the control point. A pretty strong support zone exists from here to $200, but a breach below would bring a test of the lows at $170 in March 2020 into focus./n
Read More
