BABA thoughts? Buy/Sell/Hold?

I bought BABA at 140, it’s now nearly at half its value. This one baffles me… what are peoples thoughts?

Have the fundamentals of why you invested, changed? If so you could take this as an opportunity to DCA.

The fundamentals from a high level still appear sound:

  • Alibaba annual revenue for 2021 was $109.48B , a 52.09% increase from 2020.
  • Alibaba annual revenue for 2020 was $71.985B , a 28.2% increase from 2019.
  • Alibaba annual revenue for 2019 was $56.152B , a 40.74% increase from 2018.

Another view would be the EPS increase have slowed down, so perhaps the share price is normalising in that investors are now pricing in limited growth potential. Personally there is a lot of negativity through the impact of Chinese regulations on this stock, but I think they are overly priced in and we will see a return to the 150-200 mark in the next 2-3 years.

Buy.

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Great response, I agree with all of this! I think just keeping this in the context of Trading212, if delisting were to occur; we would all have to sell at market price for ADRs held on T212.

Realistically that’s the only major scare/concern.

I’ve been holding for a year now and plan to continue. CSRC has made it clear it doesn’t want to get involved in political enforcements and is keen to work with the SEC to avoid delisting.

I have just bought back in on friday after selling midway last year. I see it as probably one of the biggest bargains out there right now. My main fear is if China were stupid enough to attack or invade Taiwan would the economic sanctions be the same as given to Russia? If so we could be looking at a long time to get our money back

I don’t think China will do what Russia did with Taiwan just yet. No one wins in that situation - that risk is overblown!

The delisting risk is probably the most realistic if anything that we’re to materialize into an issue. Although I think if the SEC and CSRC can come to an agreement that will really change the course and fortunes of the game.

Tricky question. I was able to make up most of loses on the day trades when it had price action 110-120.

But now, who knows. I definitely am not buying, it seems 50$ isn’t illusion anymore.

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Hence why i said stupid enough. In modern times Russia invading Ukraine was unthinkable 10 years ago and yet here we are. Taiwan are sounding the alarm for a reason remember. The old “just because I’m paranoid doesn’t mean they’re not out to get me”. To @Vedran , even if it does drop to $50, todays price coupled with another $50 buy in isn’t exactly a bad DCA position given the reflection of last years prices. I’m happy to get in now and wait it out for the next move. If it gets delisted then thats game over for all, but if they are trying to comply it would take a stupid decision to delist them all anyway. Time will tell ofcourse

I think the delist or not conversation is immaterial if Trading212 is able to offer an exchange for the HK Listed shares at 1 ADR to 8 HK shares.

I’ve asked Trading212 but they’ve not confirmed a position on it yet. I have some shares on Freetrade but that’s a crap platform and it’s likely I will have to take a loss there if delisting were to occur.

Realistically the delisting risk is only a risk if you cannot convert BABA to 9988 on the HK stock exchange.
Just my opinion… I’m hoping the Trading212 can pull one out of the bag given how many new stocks they’ve added all over the world for this one.

You would have to ask yourself, however, why if at all the stock delists from US, would that change the conditions of being able to invest in Chinese stocks elsewhere. I don’t see adding HK as a resolution here.

That’s the point I am making…
If it delists I and others will likely need to sell OTC (at a loss) as the ADR loses liquidity. Trading212 doesn’t support HK shares.

If they support it, you just trade in and watch your asset rise!! 9988 is safer than BABA.

Why do you think MSCI and FTSE have traded the shares in their funds?

I mean does the reason for the potential delisting not concern you that could also impact investor confidence globally in the stock, that holding it in one market or another becomes less important.

The same thing bothering me, I use t212 and I’m satisfied, but if I have to switch to IBKR because of BABA, there is no reason not to switch the whole account, to use only IBKR.

So, t212, help me to stay with you. :smiley:

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The reason for delisting has nothing to do with the company or the financials. It’s a feud between the US and Chinese policy makers.

What is IBKR?
I’ve never heard of this?

Yes the feud is in relation to accounting standards, more specifically the Holding Foreign Companies Accountable Act, that requires some foreign companies to be more transparent in making accounting documents available.

The ‘some’ or ‘foreign’ companies part are key and I would agree with China on this that it is open to interpretation and hence therefore could be ‘unfair’. Everyone should be accountable to International Accounting Standards. That said, local authorities should be able to set additional requirements to list on their exchanges.

The solution would be to allow everyone access to all exchanges, on all brokers. It then becomes a ‘local authority’ issue to highlight to investors the differences in local accounting standards and those required to list on an offshore exchange.

Thats probably where this is all going.

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Interactive brokers, as far as i was aware they are or atleast were the intermediary broker for t212. I could be wrong ofcourse

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I think they will resolve it, just needs time. 250+ Chinese companies listed on the US exchange with 5 of top of 15 being state run.

I don’t think these are just going to go out in one whack as the implication is significant!

Side note, VIE structure was a huge concern until the new year, why is no one talking about that now. I think (and hope) this too will pass…

Worst case, sell now (at loss) and transfer the cash to AJ Bell As they offer HK listing so in the event of delisting you get the HK shares. Obviously reinvesting the amount (minus fees) into BABA again.

If you are worried move to HK listing it is very easy. Also through the ‘stock connect’ program it has allowed lots of mainlanders access to HK markets, so I would say if you want to own Alibaba own it on the HK market as that is the long term future (also potentially a mainland listing). China govt will not cause Alibaba to fail, at current prices the risk reward is very good in my opinion.

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Interactive Brokers, the biggest broker in the world by the number of daily trades, holding 160B US dollars in client assets.

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Some of these stocks you just have to say are not working out and cut your losses. No point in anyone trying to prove themselves right when it comes to the stock market. We are here to make money not be right.

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