We need to put things into prospective here, $Alibaba (BABA....
We need to put things into prospective here, $Alibaba (BABA.US)$ is not a meme stock, hence, its not suitable for traders who want to hit and run with HUGE gains in few days (if your into $Tesla (TSLA.US)$, $GameStop (GME.US)$, $AMC Entertainment (AMC.US)$, and Crypto, AliBaba is definitely not for you !). AliBaba, is a "value investment" company, more suitable for the likes for Charle Munger and those who are happy to sleep on an investment for years and years without emotional regards to "Mr Market" and his minions drama.
Companies big and small all go through cycles, good and bad (competition, bad economy, supply chain bottlenecks ,etc), which shouldn't surprise (or scare) anyone as long as the business core fundamentals have not change. The company did report growth in revenues, but, missed "Mr Market" and his minions "consensus" and expectation of Tesla style growth, BIG DEAL ! ... the price dropped, but not much the company's "intrinsic value" in my humble opinion (of course it depends on what growth assumptions you have baked in your valuation).
Now you could allow Mr Market to get into you (he could be very persuasive sometimes), or you could be patient and stick to your investment thesis, redo your Intrinsic Value calculation using Baba's new guidance and see where the value stand Vs your position price.
Now with regards to this "regulatory risk", all companies around world (with no exception) are exposed to regulatory risk in one form or another (even Charities are regulated!), however, strong companies like Baba should ultimately be able to cope and live with these new regulations (and If you think the Chinese Gov simply wants to crush Baba, oh believe me, they would have done so yesterday). Then, the question is , do you trust the management of Baba to be able to turnaround things and move forward with company or not ? If you had read the history of AliBaba and Jack Ma, you should know the answer for that by now.
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TiffanyWilson : Good company, crap stock subjected to too much geo political risks. And Don’t forget that China company stocks are VIE.
Machiavellis3rdEye : Well written post. And this sounds like pretty solid and genuine trading insight. I’ll buy some more today to avg down. BABA ain’t going no where by UP in time.
Sedliberanosamalo : what the CCP did the education stocks should warn you enough that companies incorporated in China is fully under their control. If BABA doesn’t listen and transfer their profits out to CCP’s socialist push for wealth RE-distribution it will gladly cut and divide baba out. It won’t even bat an eyelid.
Anyway RSI is down and MACD wants to go down further. Lets see how Xi wakes up nx couple of months.
ReyDe Vega : Yup. Alibaba ain’t for me and it don’t belong on AMC post.
AMC and GME. We love the stock.
Bubblemosh : Alibaba is not a safe investment. Meme stocks don’t make huge gains in a few days. I’ve been holding amc and gme all year
A1EIIWLU1C : As if past performance is an indicator for future performance.
If you had read the history of AliBaba and Jack Ma, you should know the answer for that by now,
oXrssHBsXw : totally agree and a long-term value investor should be happy if the price of such a value play is going down: you can buy more at a cheaper price (if business fundementals did not change)!
Baby u : Yes, you bring up an interesting point. Mr. Market is clearly in play, because I don't see investors re-running the intrinsic valuations based on the new numbers. I hear a lot of speculation and emotion.
643YVeALhF : Updating intrinsic valuation, I find it still undervalued. The only thing compressed was the margin of safety. Mr. Market is an interesting fellow to watch, but not to believe, as far as value investing goes.
mcstiner : as the dollar loses value, the price of foreign goods seems to go up... when actually the dollar buys less. however, manufacturing isnt going to magically reappear in the US, the infrustructure was disassembled and the factories were converted to other uses.