- NYSE:BABA fell by 2.27% during Friday’s trading session.
- AliBaba shareholders will look ahead to the company’s Investor Day Event.
- AliBaba stock is cheap, but it is still not a buy.
NYSE:BABA saw an ugly year get even uglier on Thursday as the company reported its fiscal second quarter earnings results before the markets opened. Shares of Alibaba fell by more than 10% following the report, and the aftermath of the disappointing quarter continued into Friday’s session. AliBaba fell by a further 2.27% and closed the trading week at $140.34. Shares are still trading well below both the key 50-day and 200-day moving averages, which gives an indication of how prolonged this downturn has been. AliBaba also tumbled in Hong Kong on Friday, falling by 10.7% which is the most since the company started trading publicly on the Hang Seng index.
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The year over year growth for AliBaba wasn’t terrible, but it did fall short of analyst expectations. The company attributed much of its decline to ongoing regulatory crackdowns from the Chinese government, something that may stick with the tech industry moving forward. Investors will now turn to AliBaba’s Investor Day Event which begins on December 16th. There is hope that this will shine some light on some of AliBaba’s growth initiatives for the rest of the year and heading into 2022. At this point, it seems like shareholders are grasping at anything for some positive news from the downtrodden company.
BABA stock forecast
Investors may be tempted to buy shares of AliBaba at its current price. After all, the investing narrative has always been to be greedy when others are fearful. There is no stock with more negative sentiment around it right now than AliBaba, but that does not necessarily mean it is a buy. The company will have to prove that it can exist with the CCP continuing to crack down on Chinese business. It also needs to show investors that it has opportunities for growth in the future. As of now, AliBaba has fundamentally changed as an investment thesis, and there may be more pain ahead before the stock is able to recover.
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