Since its founder Jack Maconsidered one of the country’s great business leaders openly criticized Chinese financial institutions in September 2020, alibaba he has not raised his head. First it was the no to what is considered the largest global stock market exit above Aramco with the frustrated stock market debut of Ant Financial, its financial arm.
From there the ostracism of Jack Ma, who has had to literally separate from the company, regulation and a short look at their activities, with fines and penalties including Chinese regulatory authorities, the value has been penalized endlessly, down to the lows it marks right now.
Now the ones who are really tightening the rope are the regulatory authorities of the United States with other Chinese companies, although it has not been directly affected. But if it has become what Barron describes as probably “the cheapest company in the world outside of Russia”. Actually, the words come from the managing director of Artisan Partners Daniel O’Keefe who sees Alibaba as a business with great financial strength, but with many unforeseen problems that continues to be listed.
Thus, the value has more than 13.5% in total in the sessions marked as historical lows. Specifically, a little more than that percentage, due to advances in previous days, has fallen in the last week, specifically 13.8% down, with cuts of 29% in the month and 30.6% in the quarter for the value. So far this year, the fall has already reached 27% and 62% year-on-year.
In fact, Alibaba has been de facto mixed up in this domino effect, because, although it is not included among the Chinese companies that are included in the list prepared by the US Securities and Exchange Commission that could be delisted in the country if they do not comply with its accounting standards, its price lost this day, last Thursday, and 7%. A law of December 2020 requires that listed foreign companies have the documents for accounting fines and these do not.
In fact, all Chinese companies plummeted in the American market, although some experts, like those at Citigroup considering that investors are overreacting to the news. Consider that, if that exclusive occurs, it would not arrive from the SEC until 2024-2025 as long as they do not have those documents that are requested for three years in a row.
But US investors are heightening their caution against all Chinese companies listed on Wall Street that, last year they lost a whopping 600,000 million dollars in the market, mainly due to the regulatory problems that the Chinese authorities marked and their negative news for securities, especially due to their interference in the strategic decisions of the companies.
The fact is that an Alibaba that came to be valued, as Bloomberg points out, at more than 850,000 million dollars right now it is worth less than 250,000 million. specific its capitalization reaches 247,220 million dollars. and their actions They have lost no less than 70% of their price since their highs. And all this despite its high turnover, which on average reaches 22 million shares per day.
From Tipranks of the 23 analysts who follow the value, 21 choose to buy it and two to maintain with un average target price reaching $178.53 and offers a potential for Alibaba shares of almost 106%, from the lows at which it is listed.
While, from the Citi place their target price higher, at 200 dollars per share, more than doubling its current price and rated to buy on value. Nothing to do with Morgan Stanley, which greatly prefers JD.com shares over its own, after February’s results.
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