Wow! Der erste der Alibaba als "sell" mit dem Kursziel 83$ einstuft!
Undeniably, apart from slight glitches, Alibaba has managed to produce impressive financials since its US debut. Therefore, the reason behind its falling share price is in fact much deeper. Accusations by Chinese authorities regarding the sale of counterfeit goods on Alibaba’s online platform, Taobao, have dented the company’s solid image following the IPO. Moreover, a lack of measures undertaken by the company to prevent such sale and other illegal activities has also raised countless red flags from the Chinese government. A report released by the Chinese State Administration of Industry and Commerce surfaced deep-rooted problems at the company that are setting off alarms for its American investors. The report exposed: “Illegal business exists on Alibaba’s Group’s trading platforms and for a long time the company has failed to pay adequate attention and failed to make measures to stop it. This not only is the biggest crisis of integrity faced by the company since it’s founding, but has also hurt other Internet companies that try to operate legally.”
Another crucial factor raising investor concern is regarding the soon-to-be-expired lock-up period in mid-March. The last lock-up period in December saw almost 8 million shares resurface; however, 429 million ordinary shares are expected to surface in the coming month. Alibaba’s share price would then be at the mercy of the bulk of shares being sold off in the public market, much higher than the 320 million IPO count and 17% of the outstanding shares. Moreover, onset of fall this year will see 64% of outstanding shares becoming available to the public.
Interestingly, Alibaba lagged behind greatly in terms of stock performance relative to its peers, with a downgrade of 18%. On the other hand, Amazon, Alibaba’s biggest rival in the US market, has surged 23%. On the home ground, Alibaba faces extreme pressure from Tencent Holdings and Baidu Inc as they battle it out for local market share.
Another blow to Alibaba’s share price arises from institutional firms, both mutual and hedge funds, dissolving their stake in the company. Three of Wall Street’s biggest names, Leon Cooperman’s Omega Advisors, David Tepper’s Appaloosa Management, and Barry Rosenttein’s Jana Partners have unloaded the BABA stock. Lack of institutional confidence is likely to adversely affect Alibaba’s stock performance.
Analysts at Stifel Nicolaus have downgraded the stock’s rating from a Buy to a Hold rating, and CM Research has downgraded the BABA stock to Sell with a price target of $83. |
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