Alibaba looks to move past its regulatory issues
Stocks

October 20, 2021
Alibaba β the Amazon of China β is up 27% in the past two weeks with signs its fortunes are changing for the better.
What’s the big deal? Alibaba has the largest e-commerce and cloud computing business in China but Chinese regulations took BABA down along with the Chinese tech industry.
After a $2.75B fine for anti-monopoly violations and a 40% stock price drop from its peak last October, BABA’s outlook might be finally changing β with positive news for once:
- Baba is expanding its cloud business into other Asian countries (i.e. Singapore, Indonesia) β competing with Amazon and Microsoft.
- After staying low for months with the media questioning his safety β Jack Ma reappeared in public in September and is now traveling outside of China again.
Bend the knee: In the past year, the Chinese government ordered China’s internet giants to open their platforms up to competitors and investigate data security and consumer rights issues. And obeying they are…
- Companies are donating billions to support China’s common prosperity campaign β with Alibaba spending $15.7B by 2025.
- According to one Chinese central bank official β about half of the ~1,000 financial problems found on internet platforms β are resolved (via WSJ)
Invisible handcuffs: Alibaba, at risk of angering the Chinese government, may be cautious about aggressive growth moving forward. Keep an eye on these:
- π Domino effects of a potential bankruptcy from China’s largest property developer, Evergrande β growing to be China’s biggest problem.
- π Baba expanding its cloud business, which is less impacted by consumer spending, is a good sign for investors.
Must-read: Chinese tech valuations are so cheap, it’s hard not to look at their stocks.