Alibaba Below $100: What's Driving It Down?

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Alibaba Group Holding Ltd BABA has been on a continuous decline since it made a high of $119.15 in November last year. The stock has fallen the last four days and closed Wednesday at $99.58, close to the high of $99.70 it made on its debut.

Bloomberg's Stephen Engle was recently elaborated on the reasons that might be causing this downfall.

"We've moved past the holiday shopping season," Engle said. "November 11 in China is Singles’ Day, right, 11/11, so that's a big online shopping date and then there’s the Christmas buying season, Christmas is popular the world around and Alibaba has global platforms. So, there’s lots of traffic going there, we are into the kind of lull of January, also ahead of a number of different things in the horizon with Alibaba.

Related Link: Brean Capital's 12 Chinese E-Commerce Stock Picks

"Of course their first quarterly earnings report is due in February, it's the first quarterly report since that big IPO in September is in February and then we also have this lock-out period, shares coming ending in March.”

He continued, "So, the shares that were locked up become trade-able potentially in March. So, there could be an overhang. There’s some concern there as well. So, yes BABA, as the stock [is] quoted in New York, it’s down four straight days now, below $100. Now if you remember the stock price was $68 a share, right, it shot up what some 30 percent plus on day one, as high as $99.70 on day one. What it's trading at right now? $99.58. So, it’s right about the intraday high on day one. So, if you missed out on that ride up to $119.15, which was the high 75 percent gain, it’s back down to where it was mid-day on day one.”

Engle also revealed that Alibaba’s founder Jack Ma's,personal fortune is down by about half a billion dollars since the start of this year, owing to the fall in Alibaba’s stock price.

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Posted In: CNBCMediaBloombergStephen Engle
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