The underwriters will usually start to support there potion if the stock trades below IPO price. You have been able to short BABA since last Thursday, 3 days after settlement and today was the first day options traded.
Eric Jhonsa, SA News Editor
Reuters reports (citing data from Trade Alert) 45K Alibaba (BABA -1.7%) options contracts have changed hands - 24K calls and 21K puts. TD Ameritrade observes ~70% of calls and ~75% of puts have traded between their bid and ask prices, making for a fairly orderly debut.
Meanwhile, Susquehanna's Brian Nowak is the latest analyst at a non-underwriting firm to launch coverage with a bullish rating (previous). He praises Alibaba's "competitive positioning and asset-light operating structure that will enable it to continue to drive the China e-commerce market while delivering 50%+ EBITDA margins."
Nowak considers Street estimates too low, and predicts Alibaba will post a 28% revenue CAGR through 2018 as the Chinese e-commerce market grows to $1.315T (2.7x the U.S. market). His forecast assumesAlibaba's Chinese e-commerce share will fall to 76% from 81%.
09/26/2014 14:53:13 Sold Short 50 BABA @ $90 $4,489.91
09/26/2014 09:32:47 Sold Short 100 BABA @ $89.61 $8,950.81
09/23/2014 08:43:10 Bought 100 BABA @ $88.80 -$8,889.99
09/22/2014 16:58:33 Bought 50 BABA @ $89.15 -$4,467.49
09/22/2014 16:56:53 Bought 50 BABA @$89.27-$4,473.49
09/22/2014 16:18:21 Bought 15 BABA @ $89.65 -$1,354.74
09/22/2014 15:59:30 Bought 50 BABA @ $89.93-$4,506.49
09/22/2014 13:17:43 Bought 100 BABA @ $90.15 -$9,024.99
09/19/2014 12:31:53 Bought 100 BABA @ $90.75 -$9,084.99
09/19/2014 12:28:31 Bought 100 BABA @ $92.25 -$9,234.99
Shorting was available on 09/25/2014 and my position is a hedge since options are not available until open of regular trading Monday!
By Oliver Renick Sep 24, 2014 9:00 PM PT
Convinced Alibaba Group Holding Ltd. (BABA) is doomed to fall after the world’s biggest initial public offering? Now you can make that bet in the stock market.
Share transactions from the China e-commerce company’s first day of trading on Sept. 19 have been completed after a three-day settlement period and brokers are making them available for loans. That’s the first step in a short sale, where a bearish trader borrows a stock and sells it, hoping to profit by replacing it at a lower price.
By Oliver Renick Sep 24, 2014 9:00 PM PTInvestors who bought when underwriters sold shares in the company’s Sept. 18 IPO were rewarded when the stock surged 38 percent as the companyraised $25 billion. At Interactive Brokers LLC, the interest rate for borrowing Alibaba began at 25 percent yesterday morning before dropping to 7 percent, according to Matt Dahlman, a securities lender at the Greenwich, Connecticut-based firm.
China's E-Commerce Giant
“It’s surprising that it’d be that high given the size of the company, I’d expect over the coming week that it’d come down,” Eric Brock, a portfolio manager at Clough Capital Partners, said by phone. “If you’re an Alibaba shareholder and you get that 7 percent, you’re willing to lend it out.”
The fee for borrowing Facebook Inc., the operator of the world’s largest social network, was 7 percent on its first day, according to SunGard Securities Finance LLC, which tracks data on securities lending. GoPro Inc. shares came with a 70 percent rate.
Underwriters priced Alibaba at $68 on Sept. 18 and the shares opened 36 percent higher the next day at $92.70 and closed at $93.89. They slipped the first two days of this week before rebounding. The shares added 3.9 percent to $90.57 yesterday.
The company’s stock price is about 39 times the average of eight analyst estimates for Alibaba’s adjusted earnings in 2015, according to data compiled by Bloomberg. By Oliver Renick Sep 24, 2014
Hong Kong Democracy Supporters Rail Against China's Plans to Restrict Free Elections what will China take over next? Seems as it`s following in Russians foot steps like maneuvers.
Pro-democracy lawmakers in Hong Kong interrupted a Beijing official mid-speech on Monday as he sought to explain the benefits of new Chinese voting reforms that were announced over the weekend. The government reforms would restrict Hong Kong's ability to freely elect a new leader.
The lawmakers shouted slogans at Li Fei, a deputy secretary general of the Standing Committee of the National People's Congress (NPC), as he delivered a speech about the mainland's decision.
Some stood on chairs in the venue and held signs reading "Shameful" and "Loss of faith," in reference to China's perceived loss of credibility after breaking earlier promises of greater electoral freedom.
Outside the building, chaos ensued as police used pepper spray on members of a radical pro-democracy activist group who were trying to enter the premises and attempting to break the metal barriers surrounding the conference center.
China has granted Hong Kong unprecedented autonomy and expansive freedoms since it was handed back to the mainland in 1997 following 150 years of British colonial rule. The southeast Asian financial hub has been under the mainland policy of "one country, two systems" since that time, and its leadership has been elected by a committee made up of mostly pro-Beijing financial and business tycoons.Hong Kong was set to hold its first democratic popular vote elections in 2017, but these plans were capsized on Sunday with China's announcement that it would be ruling out open nominations for candidates.
The banks should take 6 months to set up and will also have to apply to start operations, the regulator said.
BTW for reference purpose since we can not post URL`s, you can acess the article on Bloombergs site under:
Alibaba Slumps in First Week as Short Sellers Enter Trade
By Belinda Cao Sep 28, 2014 9:00 AM PT
Day one for shareholders of Alibaba Group Holding Ltd (BABA) was great. Week one proved less so.
China’s largest e-commerce company slumped 3.7 percent to $90.46 last week after having soared 38 percent in its Sept. 19 debut on the New York Stock Exchange.
Alibaba, which was founded 15 years ago by Jack Ma, started trading after its record $25 billion initial public offering amid reports that indicated the world’s second-largest economy is slowing as the housing market slumps. While investors looking to tap into the world’s largest market of Internet users piled into the IPO, the economic slowdown is spurring concern the company, which gets almost 90 percent of its sales from China, may struggle to sustain growth.
“The slowdown is real and the impact on Alibaba will be shown some time next year,” David Riedel, president and founder of Riedel Research Group in New York, said in a phone interview. “It makes sense to me that the stock would be flat to down after that big pop the first day because there are obviously some concerns in the market.”
Bearish investors who profit from price declines made their first bets on a retreat in Alibaba, boosting shares sold short to 12.1 million on Sept. 25. The weekly decline in Alibaba pared its advance since the IPO to 33 percent. A Bloomberg index of the most-actively traded Chinese companies in the U.S. retreated 1.8 percent for the week. The KraneShares CSI (KWEB) China Internet Fund, which has Baidu Inc. and Tencent Holdings Ltd. among its holdings posted its third weekly decline, on track for the first monthly drop since April.
Finance Minister Lou Jiwei said Sept. 21 the government won’t make major policy changes in response to economic indicators after data from factory output to retail sales signaled the economic growth is losing momentum. New-home prices dropped in 68 of the 70 cities last month, including in Beijing and Shanghai, the National Bureau of Statistics said Sept. 18, the most since January 2011 when the government changed the way it compiles the data.
The weakness in Alibaba’s stock last week may also be caused by sales from investors who bought shares in the IPO and are now selling with a profit, according to Warren Hickman, a managing director at Shire Capital Management LLC in New York.
“What you are seeing now partially is an adjustment to people who were speculating in the stock and they are taking their profits early,” Hickman said by phone. “Over the next two weeks, you’ll see it fluctuate from its initial opening price, but over the next year you’ll see it climb beyond $93.”
Alibaba surpassed Facebook Inc. in market capitalization on its first trading day after posting the biggest price increase for a new stock offering of at least $10 billion, data compiled by Bloomberg showed. It only trails Apple Inc., Google Inc., and Microsoft Corp. in size among U.S.-traded technology companies.
About 3.3 percent of Alibaba’s listed shares have sold short, according to data compiled by Bloomberg and Markit, a London-based provider of financial information. While the amount was “relatively small” compared to total shares outstanding, it was significant considering the limited shares available to borrow after the IPO, Andrew Laird, a New York-based product specialist at Markit, said in an e-mailed response to questions Sept. 25.
My I ask why your so in denial of the current know facts? Again you post misinterpretations of current Alibaba s status and what is public information. Foresight's fine but has nothing to do with current value or what the company may or may not do! I don`t want others to be mislead and i`m not short and do still have a small position. Simply put i`m only asking you to stop being misleading and let the stock trading and management take care of what`s right for the company. There`s no quit period for this stock so all that`s out there to known and can be found and read.
No, but b-list777 likes to post that this provision will have something to do with Alibaba and also have an effect on other stock exchanges. Where he puts the two together I don`t have a clue. The fact is the HKSE had fought to exclude this from happening but Hong Kong has been a part of China since 1997, one country, two systems a signed provision action that was suppose to give in all matters except foreign relations and military defense total autonomy. So you can see buy this action that China is braking down their agreement with Hong Kong`s autonomy. Shanghai Hong Kong Stock Connect is a securities trading and clearing links program to be developed by Hong Kong Exchanges and Clearing Limited (HKEx), Shanghai Stock Exchange (SSE) and China Securities Depository and Clearing Corporation Limited (ChinaClear), aiming to achieve a breakthrough in mutual market access between the Mainland and Hong Kong. Under Shanghai Hong Kong Stock Connect, the stock exchange of Hong Kong Limited (SEHK), a wholly owned subsidiary of HKEx, and SSE will establish mutual order routing connectivity and related technical infrastructure to enable investors of their respective markets to trade designated equity securities listed on the others market.The Hong Kong Securities Clearing Company Limited (HKSCC), also a wholly owned subsidiary of HKEx and China Clear will be responsible for the clearing, settlement and the provision of depository, nominee and other related services of the trades executed by their respective market participants and investors.
I`ll get lost, but all your post are poorly constructed words having no current baring to the stock or the company so i`ll leave you to belly up to the stock bar and buy all you can or by some puts or calls whatever your conviction may be!
On a final note for you to ponder!
NEW PLATFORM FOR SHORTS
The start of options trading Monday will give short sellers an additional venue for betting on a drop in the stock. Alibaba's share price has now retreated around 5 percent after a first-day gain of about 38 percent. If the shares are difficult to borrow to sell short given it is still so soon after the IPO, that could drive more shorts into Alibaba options as an alternative and this could put downward pressure on the stock. The cost to borrow Alibaba shares has varied widely in the days since the IPO.
Your babbling now!
Another big data point to consider for a provision or investor tool is the subject of divergences and narrow leadership is the fact that according to Bloomberg, 47% of the stocks on the NASDAQ are currently down 20% or more from their peaks in 2014. And again, narrow leadership is another classic indicator of a market top. Think this is forcing the shorts hand? Margin debt edges higher in August. NYSE margin debt climbed to about $463.02 billion in August from about $460.23 billion in July, a hike of $2.79 billion, or 0.61 percent, while SPY rose to an adjusted all-time high of $199.78 from $192.19, a soaring of $7.59, or 3.95 percent. Who`s got a clearer picture of the markets, big hedge funds or the blind leading the blind retail investor? Paying Attention Works!
The Shanghai Hong Kong Stock Connect program will allow investors in mainland China to buy Hong Kong listed stocks and allowing all types of OVERSEAS investors to buy shares ON the Shanghai Stock Exchange. They can not buy unlisted stocks or options of another country through the exchange. They only way they could, if allowed, would be to open a brokerage account in the country they wish to trade in.
The Hong Kong 'H' Chinese Shanghai Exchange does not hold shares of BABA or any of it`s derivatives I should say so how would shorts or longs gain from that venture?
The Hong Kong 'H' Chinese Shanghai shares do not hold shares of BABA so how would shorts or longs gain from this venture?
Employees and ex-employees dumped 8 Billion of BABA stock on first day of trading. No lock up for stock owners is another highly unusual feature of this IPO. Seems to me this is cash out of the pockets of newly minted investors. It`s a written fact that there was over five thousand employees who sold the stock during the IPO and that the total amount is about $8 billion dollars, so that`s a lot skimmed off the stock on its first day.
That`s true, but after doing more D&D and with the worlds economy slowing down again due to geopolitical events and China, i`m just posting what I see, read and hear. My post are trying to get people back to a true sense of reality. Look at the whole picture not just the stock. I strongly believe BABA, like all IPO`s do will revert back to it`s mean but too many posters are to the moon with stratospheric short term price projections on this board and it`s to soon to call for that. I like this plays future but earning estimates coming in lower than last Q`s doesn`t play well going forward and I know analyst do low ball earnings. I want to hear from MA how their eCommerce and other business lnes will drive earnings in a slowing economy with a price to book MRQ 26.16 X`s earnings current. How are the companies they have partnered with going to dive income to the bottom line? Most are just chasing this stock when it should be traded until we get a clearer picture. GLTY
YUUUUP! That`s why there`s strong selling into the bid after hours. Gonna drop like a rock Monday. Mark this post so you can eat crow!