Alibaba (BABA) shares fell over 46% this year, making them cheapest ever

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Alibaba (BABA) shares fell over 46% this year, making them cheapest ever

 Alibaba (BABA) shares fell over 46% this year, making them cheapest ever
Image source: Freedomz,Shutterstock

Highlights

  • The shares of Alibaba Group Holding Ltd (NYSE: BABA) have been falling since the crackdown on the company by Chinese regulators last year.

  • Alibaba’s top growth segments: fintech, online advertising, data, and content have been under government scrutiny.

  • Chinese regulators have rejected media reports claiming that China could ban domestic companies from listing abroad.

US-listed shares of Chinese technology conglomerate Alibaba Group Holding Ltd (NYSE: BABA) declined more than 46% this year, making them the cheapest ever.

The BABA shares had been declining since the crackdown on the company by Chinese regulators last year. As a result, the company lost around US$526 billion in value over the past 13 months.

The stock was priced at US$122.05 at 4:53 pm ET on Thursday, compared with the closing price of US$227.85 on Jan 4, 2021, around a 46% decline.

Alibaba (BABA) shares fell over 46% this year, making them cheapest ever

Its current share price is the lowest since its US debut in 2014. On Wednesday, the stocks fell 4% to US$122.49 at the close, the biggest drop since May 2017.

Its Hong Kong shares closed 2.5% down on Thursday.

The company’s top growth segments: fintech, online ad, data, and content, have been under scrutiny. Its sales in the latest reporting quarter missed the estimates.

Also, the company expects slow revenue growth in 2022.

Also Read: US stocks rise, lifted by financial, energy stocks

The BABA shares have been declining since the crackdown on the company by Chinese regulators last year.

Source: Pixabay

Also Read: Five key US economic sectors to keep an eye on in 2022

Chinese tech companies stare at uncertain future

Domestic tech companies face an uncertain future as crackdowns continue. According to people familiar with the matter told Bloomberg that China might be planning to ban companies from going public on foreign soil, a move that could permanently impair the enterprising spirit in the country.

However, the China Securities Regulatory Commission on Wednesday rejected the media claims. The agency said on its website that media reports claiming that China might use the VIE structure to ban domestic companies from listing abroad are not true, without giving further details.

In the first quarter ended June 30, 2021, Alibaba’s revenue grew 34% YoY to US$31,865 million. However, its net income fell 5% to US$6,991 million. Alibaba’s annual active consumers had reached 1.18 billion at the end of the quarter.

Also Read: Square Inc (SQ) changes corporate name to Block

Bottomline

While the Chinese companies face the brunt of regulators at home, they also have increased scrutiny from market regulators in the US. The US-China tensions over a host of issues from bilateral trade, Taiwan issue to South China Sea dispute have proved destructive for some companies.

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