Alibaba Group Holdings, Inc. BABA shares have been in the doldrums ever since Chinese regulators began hounding the company following anti-establishment outbursts by its founder Jack Ma in late 2020. An astute investor who began piling into the shares of the Chinese ecommerce behemoth, taking advantage of the depressed stock price, apparently is losing patience.
What Happened: Daily Journal, a hedge fund run by Charlie Munger, who is more famously known as billionaire Warren Buffett's right-hand man, cut its stake in Alibaba by half, a 13F filing by the firm late Monday showed.
At the end of the first quarter. Daily Journal held 300,000 shares of Alibaba in its portfolio, valued at $32.64 million. This is markedly lower than the 602,060 Alibaba shares the fund held at the end of the fourth quarter of 2021.
Munger, who also serves as the vice chairman of Berkshire Hathaway Inc. BRKB BRKA, first picked up a stake in Alibaba in the first quarter of 2021.
Here's how Daily Journal's holdings changed over the quarters:
Related Link: Alibaba Vs. JD.com: Who's Winning The Chinese E-Commerce Battle?
Why It's Important: Apart from the regulatory overhang that is casting a cloud on Alibaba stock's recovery attempt, the company is facing other risks as well. Even ahead of the renewed outbreak of COVID-19 in China earlier this year, the company was left contending with a softer consumer spending environment.
The company is also facing intensifying rivalry in the domestic market, not only from established peers such as JD.com JD, but also from short video apps, which are tapping into the younger demographics through live shopping broadcasts by Internet celebrities.
Even with all these abounding risks, Alibaba is a hit with sell-side analysts, who are sold on the company's long-term potential. The average analysts price target for Alibaba's shares, according to TipRanks, is $174.12, suggesting about 72% upside from current levels.
In premarket trading, Alibaba shares were edging down 0.02% to $101.53.
Related Link: Alibaba Maintains Stronghold Over Chinese Cloud Market: What's Behind The Outperformance
Photo: Courtesy of alibabagroup.com
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