AABA - Altaba Inc.

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
70.30
+0.10 (+0.14%)
At close: 4:00PM EDT

70.30 0.00 (0.00%)
After hours: 4:30PM EDT

Stock chart is not supported by your current browser
Previous Close70.20
Open70.11
Bid70.21 x 1800
Ask70.28 x 800
Day's Range70.11 - 70.30
52 Week Range54.75 - 79.18
Volume5,001,772
Avg. Volume5,606,865
Market Cap36.522B
Beta (3Y Monthly)1.79
PE Ratio (TTM)N/A
EPS (TTM)-8.10
Earnings DateOct 29, 2019 - Nov 4, 2019
Forward Dividend & YieldN/A (N/A)
Ex-Dividend Date2019-09-24
1y Target Est76.00
Trade prices are not sourced from all markets
  • If Alibaba Stock is Going to Rally Again, Now is the Time
    InvestorPlace

    If Alibaba Stock is Going to Rally Again, Now is the Time

    It would seem like the news has been pretty good of late for Alibaba Group (NYSE:BABA) stock … with one obvious exception. The last two earnings reports have looked impressive. The overhang of a major stockholder is ending. And yet Alibaba stock has stayed stuck, trading sideways since February.Source: Nopparat Khokthong / Shutterstock.com To be sure, the U.S.-China trade war presents an apparent stumbling block in front of BABA stock. But rival JD.com (NASDAQ:JD) has outperformed Alibaba shares of late, while facing the same trade-driven macro headwinds at home.JD isn't the only Chinese stock with better returns. Yes, Alibaba Group shares have returned 27% so far this year. That's better than the 16% average of China's 21 U.S.-listed large-cap (>$10 billion) stocks. But that return puts BABA stock just seventh in the group, well behind leaders New Oriental Education & Technology Group (NYSE:EDU) and Pinduoduo (NASDAQ:PDD), the latter of which has almost doubled in the last two-plus months.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSo, relative underperformance, a cheap valuation, and Alibaba's market-leading status would seem to clear a path for BABA stock to finally break through $200 and beyond. After all, it's hard (though not impossible) to see external conditions being much worse, yet Alibaba has grown earnings and Alibaba stock has managed to rise.That path is open. But the concern has to be that if BABA shares stay stuck, it could signal they're going to be stuck for a very long time. What's Gone Right (and Wrong) for Alibaba StockAlibaba Group has had some headwinds in 2019. The trade war has pressured consumer and business confidence in China, as several companies have noted in recent months. Protests in Hong Kong have only added to the geopolitical risk, and likely led to Alibaba's decision to delay its listing on the Hong Kong exchange. * 7 Deeply Discounted Energy Stocks to Buy Major shareholder Altaba (NASDAQ:AABA) is liquidating its Alibaba stock. According to Alibaba's second quarter release, that company (formerly Yahoo!) sold almost 10% of Alibaba shares outstanding between May 20 and August 9.There are pressures on the business and pressures on the stock. And yet Alibaba has posted strong back-to-back earnings reports. Revenue increased 51% year-over-year in the fiscal fourth quarter (ending March) and another 42% in Q1. Adjusted EPS handily beat Street estimates in both quarters.Meanwhile, BABA stock hasn't exactly soared -- but it's held up. The stock bounced from levels around $150 in late May, amid the Altaba selling, and has neared $180 three times in the past few weeks.Given those external pressures, the case for BABA stock here is that in a tough environment, investors still were happy to buy and/or own shares. So what happens when that environment gets better? After all, Altaba's liquidation is likely over at this point. The trade dispute should be resolved at some point, even if that point isn't necessarily anytime soon. Put another way, it seemingly only can get better for Alibaba Group, and for Alibaba stock, from here. Long-Running Concerns About BABA StockThe catch is that for some investors, it's not going to get better for BABA stock. To bears, Alibaba has significant structural problems. Its VIE structure -- shareholders actually own a piece of a variable interest entity in the Cayman Islands, not Alibaba itself -- makes BABA a no-go for some investors.Accounting issues have long dogged the company. They were raised again in the decision to go forward with the Hong Kong listing. As I noted at the time, it was strange for Alibaba to sell stock at seemingly cheap prices to raise capital when it had plenty of cash already. Indeed, the company is paying $2 billion to acquire Kaola from NetEase (NASDAQ:NTES), a deal it is financing from cash on hand. * The 8 Worst Stocks to Buy Before the Trade Turmoil Cools Off There have been worries about self-dealing, highlighted by Alibaba's move of Alipay to former CEO Jack Ma. And many investors ignore Chinese stocks altogether, worried about a "hard landing" or, worse, an implosion of the economy still run by a nominally Communist single party. Can Alibaba Group Stock Finally Rally?Those skeptics admittedly could be wrong. "Hard landing" predictions, for instance, have been made for at least this entire decade. The VIE structure could change once Chinese regulations do. And, to at least some extent, a 20x forward P/E multiple incorporates those risks.But at least for now, those skeptics and that skepticism seem to matter. They're at least one reason why a proverbial lid has stayed on BABA stock. (Shares at this point haven't moved for two years now.) They're why, to some investors, Alibaba stock seems like a generational opportunity: an e-commerce leader in a country with over a billion citizens trading at a discount to many U.S.-based large caps with minimal growth. Other investors simply see the stock as a trap at almost any price.If the news around Alibaba stock gets better, particularly with the Altaba overhang gone, BABA stock has to rally. Otherwise, BABA starts to look like a stock that looks cheap - and will always look cheap, given the structural risks assigned by the market. As bearish as I've been on BABA, I can see that path to $200+. If Alibaba stock doesn't take that path, however, it might be time to worry.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post If Alibaba Stock is Going to Rally Again, Now is the Time appeared first on InvestorPlace.

  • Barrons.com

    Altaba Payout to Shareholders Comes Up Short

    Altaba, the former Yahoo, announced a lower-than-expected initial distribution as part of its liquidation program as the company appears to be taking a conservative approach to dealing with potential future liabilities.

  • MarketWatch

    Altaba declares distribution price as part of liquidation plan, which is less than original estimates

    Altaba Inc. declared Friday a pre-dissolution liquidating distribution of $51.50 in cash per share this month, which was less than originally estimated. The distribution will be paid on Sept. 23 to shareholders of record on Sept. 16. The distribution is part of Altaba's plan to liquidate and dissolve the investment company, which assets consist primarily of China-based e-commerce giant Alibaba Group Holding Ltd. stock. When the Altaba announced board approval of the liquidation and dissolution plan on April 2, the company had estimated a fourth-quarter distribution of between $52.12 to $59.63 per share. Since then, Alibaba's stock has lost 1.5% through Thursday. Altaba's stock was still inactive in premarket trading, while Alibaba shares gained 0.5%. Year to date, Altaba shares have rallied 20.2% and Alibaba's stock has surged 30.6%, while the S&P 500 has gained 18.7%.

  • Business Wire

    Altaba Announces Pre-Dissolution Liquidating Distribution of $51.50 Per Share

    Altaba Inc. (“Altaba” or the “Fund”) (AABA) today announced that, on September 5, 2019, the Board of Directors (the “Board”) of the Fund declared a pre-dissolution liquidating distribution of $51.50 in cash per share of its common stock, par value $0.001 per share (the “Shares”), which will be paid on September 23, 2019 to stockholders of record as of September 16, 2019 (the “Pre-Dissolution Liquidating Distribution”). The Fund expects that the ex-dividend date for such distribution will be September 24, 2019, the day after the payment date for the Pre-Dissolution Liquidating Distribution. As previously announced, stockholders of the Fund approved the liquidation and dissolution of the Fund pursuant to a Plan of Complete Liquidation and Dissolution (the “Plan”) at a special meeting of stockholders held on June 27, 2019.

  • 3 Special Situations Gurus Are Buying
    GuruFocus.com

    3 Special Situations Gurus Are Buying

    Allergan makes the list Continue reading...

  • Barrons.com

    Altaba Is Due to Announce Its First Payout Soon. It Could Be Time to Sell.

    The former Yahoo! will announce its first distribution to shareholders—a cash payout equal to a large percentage of its current market value of $36 billion—ahead of its eventual dissolution.

  • Moody's

    Alibaba Group Holding Limited -- Moody's affirms Alibaba's A1 ratings; outlook stable

    Moody's Investors Service has affirmed A1 issuer rating and A1 senior unsecured rating of Alibaba Group Holding Limited. "The ratings affirmation reflects Alibaba's leading market position in China, and its solid track record of cash flow generation and maintenance of a strong financial profile," says Lina Choi, a Moody's Senior Vice President. "We expect Alibaba will continue to expand its business scope in a prudent manner, by generating steady operating cash flow and maintaining a financial profile appropriate for its A1 ratings," adds Choi, who is also Moody's Lead Analyst for Alibaba.

  • The Postponement of the Hong Kong Listing of Alibaba Stock Is Nothing But a Blip
    InvestorPlace

    The Postponement of the Hong Kong Listing of Alibaba Stock Is Nothing But a Blip

    Alibaba (NYSE:BABA) decided at its board meeting before the announcement of its first-quarter earnings that it would delay the listing of Alibaba stock in Hong Kong. The company cited the ongoing political unrest on the island as the reason for its decision. Source: BigTunaOnline / Shutterstock.com InvestorPlace - Stock Market News, Stock Advice & Trading Tips"It would be very unwise to launch the deal now or anytime soon. It would certainly annoy Beijing by offering Hong Kong such a big gift given what's going on in the city," Reuters reported a source saying in an article published on Aug. 21.While Alibaba is looking to raise up to $15 billion by listing BABA stock on the Hong Kong Exchange, it understands the politics of China; it wouldn't want to offend anyone in the Chinese government. So, the listing of Alibaba stock will have to wait until the situation in Hong Kong simmers down. * 7 "Boring" Stocks With Exciting Prospects By no means does the company consider the delay a major concern. However, the Hong Kong Stock Exchange must be freaking out. First, Anheuser-Busch InBev (NYSE:BUD) canceled the $9.8-billion listing of its stock on the exchange, and now Alibaba has delayed its listing, resulting in a double blow to the exchange's reputation. As long as Alibaba eventually lists its shares on the Hong Kong exchange, Alibaba stock will do just fine. If, however, the listing is canceled entirely, Alibaba Group stock could suffer some damage. However, it can't hurt to consider what the ramifications of not listing Alibaba stock in Hong Kong would be for the e-commerce giant. Not Listing Would Be CostlyBy canceling the Hong Kong listing, BABA would displease the Chinese government and Chinese investors, who've been able to buy Hong Kong stocks for the past five years. Additionally, listing BABA stock would enable Chinese investors to buy the large number of shares of Alibaba stock that look poised to flood the markets over the next few years. If the listing is canceled, the impending sale of those shares could meaningfully weigh on Alibaba Group stock. Two major firms look poised to sell large amounts of BABA stock. Not only is Softbank (OTCMKTS:SFTBY) open to the idea of lowering its stake in Alibaba, but Altaba (NASDAQ:AABA), the company set up to hold Yahoo's 11% stake in BABA, announced in April that it was planning to liquidate those shares and dissolve itselfFinally, some U.S.-listed companies have de-listed from American exchanges in the past, opting to re-list in China where their stocks tend to get higher valuations. Alibaba Group stock continues to be significantly undervalued relative to Amazon (NASDAQ:AMZN). By listing in Hong Kong, BABA would give itself a better shot at a higher valuation. Of course, if the Hong Kong listing is canceled, BABA won't get the opportunity to raise the valuation of BABA stock. Alibaba's Business Will Be Strong Either WayOne need only look at BABA's Q1 results to know Alibaba's business is doing just fine.Its revenue grew 42% year-over-year and its operating income increased 27% excluding share-based compensation, while its free cash flow was a robust $3.8 billion. The revenue of its cloud-computing business, which is considered an up-and-coming part of the company, grew 66% YoY to $1.1 billion. It now accounts for 7% of Alibaba's overall revenue. And the top line of its e-commerce business, which accounts for 66% of its overall revenue, increased 40% YoY in Q1. That jump demonstrates that its legacy business is alive and doing very well. BABA finished Q1 with $30.7 billion of cash and cash equivalents. At the moment, it has plenty of momentum in all of its businesses and the cash necessary to keep those plans moving ahead. With or without a Hong Kong listing, BABA stock will be a long-term winner. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 "Boring" Stocks With Exciting Prospects * 15 Cybersecurity Stocks to Watch as the Industry Heats Up * 5 Healthcare Stocks to Buy for Healthy Dividends The post The Postponement of the Hong Kong Listing of Alibaba Stock Is Nothing But a Blip appeared first on InvestorPlace.

  • GuruFocus.com

    Michael Burry Buys 4 Stocks in Addition to GameStop

    Big Short investor also shutters former largest holding JD.com Continue reading...

  • Ruane Cunniff Cuts Alphabet, Fiat
    GuruFocus.com

    Ruane Cunniff Cuts Alphabet, Fiat

    Guru's largest sales of 2nd quarter Continue reading...

  • BlackRock Buys Stake in Authentic Brands: How Should Investors React?
    Zacks

    BlackRock Buys Stake in Authentic Brands: How Should Investors React?

    On Sunday, August 11th, BlackRock (BLK) announced that it would be purchasing a roughly 30% stake in privately held Authentic Brands for $875 million, a deal that values the company at over $4 billion. Shares closed down 2.62% in trading Monday.

  • Matthews Japan Fund's Top 5 Buys of the 2nd Quarter
    GuruFocus.com

    Matthews Japan Fund's Top 5 Buys of the 2nd Quarter

    Fund’s top buys include Yahoo Japan Continue reading...

  • Dr. Michael Burry of 'Big Short' Likes Asia Stocks
    GuruFocus.com

    Dr. Michael Burry of 'Big Short' Likes Asia Stocks

    Scion opens Asia fund focused on only certain countries Continue reading...

  • How Tumblr Makes Money: Sponsored Posts and Advertisements
    Investopedia

    How Tumblr Makes Money: Sponsored Posts and Advertisements

    Tumblr is one of the most-visited sites on the web, with roughly 80 million new posts produced per day. Here's how the company makes money.

  • Alipay is Just Another Point of Contention for Alibaba Stock Investors
    InvestorPlace

    Alipay is Just Another Point of Contention for Alibaba Stock Investors

    As the Alibaba (NYSE:BABA) stock price rallies again, something's still missing: Alipay. Alipay and its parent company, Ant Financial, aren't owned by Alibaba … yet. Still, investors already are pricing their value into BABA stock.Source: Shutterstock Indeed, my InvestorPlace colleague Wayne Duggan highlighted Alipay as a "secret weapon" for Alibaba. Wall Street analysts, as Duggan noted, have taken a similar shine to the payment product. It's been compared to PayPal (NASDAQ:PYPL) and Square (NYSE:SQ). Alipay seems to be a reasonably large part of the BABA stock bull case.But Alipay -- or at least its history -- is part of the bear case for the stock, too. That's worth remembering as the BABA stock price tries to make another run to the highs.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Alipay and Yahoo!Back in 2011, Alibaba's then-CEO Jack Ma basically took Alipay from Alibaba. Yahoo!, now Altaba (NASDAQ:AABA), which owned 43% of Alibaba at the time, saw its stock fall almost 10% as a result.For its part, Alibaba insisted that Yahoo! knew about the move, which ostensibly was made to satisfy new regulations which prohibited foreign ownership of payment companies. Yahoo! denied it had been told about the transfer ahead of time.The two companies settled the dispute in 2011 by giving Alibaba a 37.5% share of Alipay profits. That was better than nothing for Alibaba and its shareholders -- but a far cry from the 100% of earnings to which they felt entitled. * 10 Tech Stocks That Are Still Worth Your Time (And Money) Then last year, Alibaba said it would take a 33% stake in Ant Financial, Alipay's parent, as part of its rights under an amended version of the 2011 agreement. Alibaba will forego its profit sharing in exchange for the newly issued shares.But more than a year later, that deal hasn't closed. Management commentary has been limited. The regulatory process no doubt is difficult. Still, given Alibaba's history, investors could be forgiven for wondering what, exactly, is taking so long. Questions Surrounding Alibaba StockThe issuance of the 33% stake, should it close, would by no means settle the concerns surrounding Alipay and Ant Financial. The fact that Ma transferred the asset away from Alibaba and to himself suggests a risk of similar self-dealing by other executives. Meanwhile, as Alibaba admitted in filings ahead of its IPO, the supposed restriction that drove the move never materialized. For investors who struggle to trust Alibaba, the Alipay saga is a key reason why.Meanwhile, Alipay's profits evidently plunged last year, with Alibaba's share of fees from Ant Financial dropping by 85% in Alibaba's fiscal 2019. Commentary in the company's 20-F and on conference calls suggest that Alipay is investing for growth. But given that the app supposedly is already entrenched in China -- with some 700 million users, per management commentary -- that decline seems enormous, even with spending on new markets.All the while, there have been repeated steps in the direction of an Ant Financial IPO. Those efforts date to 2016. Yet a potential offering has been pulled on multiple occasions, most recently in 2018. * 7 Defense Stocks to Buy to Fortify Your Portfolio All of these issues, for bears, go to the idea that Alibaba simply isn't trustworthy -- and that the BABA stock price still doesn't reflect that problem. There simply are so many risks here. Alibaba stock isn't even ownership in Alibaba itself. A valuable business unit was pulled out of the company for reasons that still remain unclear. Alipay suddenly isn't profitable while at the same time the Chinese economy is slowing and regulators are pushing back. What else is going on here? The Case for BABA StockIt's possible these risks are just the price of being a owner of BABA stock. (Or, more accurately, a shareholder in a Cayman Islands-based variable interest entity with a contractual right to Alibaba's profits.) And it's possible that over time, China's financial system will become more open -- and more regulated. Meanwhile, as I wrote this month about iQiyi (NASDAQ:IQ), some investors see the opportunity in China as more than worth the risks.But there are going to be bumps along the way -- one reason why the Alibaba stock price has struggled to rise with any consistency. On its face, ownership of China's e-commerce leader at a reasonable, if not attractive, earnings multiple seems like a slam dunk. But whether it's Alipay, the new listing in Hong Kong, or shareholder rights, there are real concerns about Alibaba stock at the moment. And until that changes, BABA may stay stuck.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy From This Superstar Fund * 7 Stocks to Buy This Summer Earnings Season * 7 Marijuana Penny Stocks to Consider for Those Who Can Handle Risk The post Alipay is Just Another Point of Contention for Alibaba Stock Investors appeared first on InvestorPlace.

  • Will Alibaba Stock Soar Thanks to Its Hong Kong Listing?
    InvestorPlace

    Will Alibaba Stock Soar Thanks to Its Hong Kong Listing?

    Despite trade tensions between the U.S. and China and Altaba (NASDAQ:AABA) liquidating its stake in Alibaba (NYSE:BABA), Alibaba stock has done very well in 2019, rising 21% year-to-date. A big part of its success this year is BABA's plan to list its shares in Hong Kong.Source: Shutterstock According to Bloomberg, Alibaba has filed confidentially for a Hong Kong listing in what could be the territory's biggest listing sale since 2010. Although the final fundraising target isn't finalized, Alibaba could raise as much as $20 billion from the listing.Before it IPO'd in New York in 2014, Alibaba considered listing in Hong Kong but decided against it due to tougher ownership regulations in the territory. If Alibaba listed in New York, Jack Ma and cofounder Joseph Tsai could still retain control of the company despite not owning a majority percentage of Alibaba. In Hong Kong, Ma and Tsai would not be able to control Alibaba so effectively.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAlthough Hong Kong hasn't changed its ownership rules, Alibaba is now much more inclined to a Hong Kong listing. First, Jack Ma plans to retire and focus more on philanthropy. Second, the Chinese government seems to want more Chinese companies to list in China rather than in New York. * 10 Stocks Driving the Market to All-Time Highs (And Why) Naturally, many investors wonder how much upside a Hong Kong listing would mean for Alibaba's U.S. shares. A Listing That's Bullish, But Only Partly SoI believe Alibaba's U.S. listed stock will benefit from the listing, but only slightly. If Alibaba were to list in Hong Kong, I believe the stock would be valued at a higher multiple than its current valuation in New York. More people use Alibaba's services and websites in China and Hong Kong, and the added awareness will likely generate more buying from retail investors, which could give Alibaba a higher valuation. While that sounds like great news for U.S. owners of Alibaba, it's only partly bullish because the two exchanges are hard to arbitrage. In an ideal world, if Alibaba's stock in Hong Kong were priced higher than it was in New York, an astute investor could buy the New York stock and sell the Hong Kong stock, and hope for an eventual closing in a relatively risk-free manner. The problem is that a closing isn't guaranteed to happen in the real world. Although the Hong Kong dollar is pegged to the U.S. dollar, there isn't a Hong Kong New York stock exchange connect where an investor could easily buy the Hong Kong listed Alibaba stock and simultaneously sell the New York listed stock. Meaningful discounts between similar securities have also persisted for many years before. For a long time, South African conglomerate Naspers traded for a 30% discount to its Tencent (OTCMKTS:TCEHY) stake alone, despite Naspers owning things outside of Tencent. Are There Plenty More Reasons to Buy Alibaba Stock?There is a lot to like about BABA stock besides the fact that it will list in Hong Kong. Although it dominates e-commerce in China, BABA trades for just 19 times forward earnings estimates, which almost makes it a value stock considering its future earnings growth potential. Furthermore, Alibaba isn't just an e-commerce play. Due to various astute investments, Alibaba has exposure to China's mobile payments market with partial ownership of Alipay, exposure to China's cloud growth with Alibaba Cloud, and exposure to a variety of future markets due to its leadership in artificial intelligence. By being one of China's top two tech companies, Alibaba has the financial resources to buy or copy the business models of competitors that might disrupt it. It has the financial resources to invest in startups of promising sectors and participate in their growth as well. * 7 Stocks Being Inflated by Low Rates As for the potential long-term effect of the Hong Kong listing, the listing could improve Alibaba's fundamentals if management executes. If the company uses the money raised for productive purposes such as investing more in the cloud or artificial intelligence, Alibaba's margins and earnings-per-share could go higher and that'll benefit investors everywhere, not just in Hong Kong.As of this writing, Jay Yao did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Dependable Dividend Stocks to Buy * 10 Stocks Driving the Market to All-Time Highs (And Why) * 7 Short Squeeze Stocks With Big Upside Potential The post Will Alibaba Stock Soar Thanks to Its Hong Kong Listing? appeared first on InvestorPlace.

  • Investing.com

    Gold Prices Claw Back Some Lost Ground From U.S.-China Trade Truce

    Investing.com - Gold prices on Tuesday clawed back a portion of the territory lost at the start of the week after the U.S. and China declared a trade truce, but remained below $1,400.

  • Business Wire

    Altaba Announces Stockholder Approval of Plan of Complete Liquidation and Dissolution

    Altaba Inc. (“Altaba” or the “Fund”) (AABA) today announced that, at the Fund’s special meeting of stockholders (the “Special Meeting”) held earlier today, its stockholders voted to approve the voluntary liquidation and dissolution of the Fund pursuant to the Plan of Complete Liquidation and Dissolution (the “Plan”). The Fund announced on April 2, 2019 that its board of directors (the “Board”) had approved the Plan.

  • How Yahoo Makes Money
    Investopedia

    How Yahoo Makes Money

    Most of Yahoo’s current business model might sound redundant, but it still remains one of the most popular web sites in the world. Here's how it generates revenue.

  • Investopedia

    How Do Internet Browsers Make Money?

    When most people think of the Internet, they typically think of the specific websites and spend little time wondering about the browsers that they're using. Most people have used a variety of browsers from Internet Explorer to Google's (Nasdaq:GOOG) Chrome and unlike most of the services that you can attain from the Internet, the browsers - the tools that actually make using the Internet possible - are free. One would think that this would be the aspect of the Internet that would cost money, but it isn't, so that raises the question, how do Internet browsers make money?

  • With BABA Stock Price Down, Why Is Alibaba Selling Shares In Hong Kong?
    InvestorPlace

    With BABA Stock Price Down, Why Is Alibaba Selling Shares In Hong Kong?

    Alibaba (NYSE:BABA) reportedly is getting a Hong Kong listing. Multiple reports suggest the company is planning to sell $20 billion worth of Alibaba stock on the Hong Kong Stock Exchange. A key question, with the BABA stock price down about 18% from early May highs, is "Why now?".Source: Shutterstock As with so much when it comes to Alibaba stock, bulls and bears likely will answer the question very differently. Bulls see the company raising capital for its myriad initiatives -- and potentially raising the profile of BABA stock. Bears wonder why the company needs the cash and why it needs to do such a deal now.BABA has long been a battleground stock. The Hong Kong listing likely will only harden both sides.InvestorPlace - Stock Market News, Stock Advice & Trading Tips The Case for the Alibaba Stock OfferingThere are two broad benefits to the cross-listing. One, Alibaba's plan to list on the Hong Kong exchange could -- and maybe should -- drive the BABA stock price higher.Hong Kong-listed shares can be owned directly by Chinese investors. Those investors might see Alibaba more favorably than their foreign counterparts. And if Alibaba stock rises on the Hong Kong exchange, its New York listing might do the same, as arbitrageurs buy cheaper New York-listed shares. * 7 Top-Rated Biotech Stocks to Invest In Today That said, those arbitrageurs also would sell the Hong Kong-listed shares, potentially mitigating some of the effects of increased demand. And the two shares would not be the same: BABA stock does not offer direct ownership of the company. Rather, 'shareholders' own a stake in a VIE (variable interest entity) in the Cayman Islands.That VIE has a contractual right to Alibaba profits -- but that's not the same thing as actually owning shares of Alibaba itself. As such, it would seem almost certain that Alibaba shares in New York will trade at a consistent, if modest, discount to the Hong Kong-listed shares to account for the VIE-related risk.Still, details aside, a second listing could increase demand for Alibaba stock, particularly among China's retail investors. Smaller investors control 35% of the Chinese market, against an 8% share in the U.S. And the pending Alibaba stock split likely allows those Chinese retail investors to afford smaller positions. There is a case that BABA stock should get a bump from the two listings.The second goal, apparently, is to raise capital. Alibaba's New York IPO was the largest in history, raising $25 billion. Alibaba reportedly will bring in another $20 billion this time around. Those funds can be used for more acquisitions; building out the cloud business; or further investing behind the business.That in turn would seem to signal a longer-term rise in Alibaba stock, assuming the funds are invested well. The Case Against the OfferingSo BABA bulls no doubt see the new listing as good news. Indeed, the BABA stock price has risen modestly of late, though a stronger broad market likely plays a role as well.But for Alibaba skeptics, the offering seems curious. That's particularly true for investors who question the company's accounting, The first question is why, exactly, Alibaba needs another $20 billion. The company closed fiscal 2019 (ending March 31) with $28.3 billion in cash on its balance sheet. Alibaba owns another $24 billion or so in investment securities (not including its investments in private companies). That $44 billion war chest sits against total debt of less than $9 billion.To be sure, Alibaba does have places to spend its cash. The company's operations beyond core commerce last year -- cloud computing, digital media and entertainment, and its "innovation initiatives" -- all posted losses last year as Alibaba invested in future growth. In cloud, Alibaba is trying to replicate the success of Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT). Rival JD.com (NASDAQ:JD) is spending heavily on its supply chain.But operating losses for those segments totaled a little over $5 billion. Even with those losses, free cash flow was somewhere in the range of $15 billion, even including payments for copyrights and other intangible assets. * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 For those who doubt Alibaba, the offering (which reportedly will be of new shares) makes little sense. Alibaba, if its financials are accurate, has more than enough cash to fund even aggressive investments in its new initiatives. Unless there's a big acquisition planned, Alibaba is diluting its shareholders for money it doesn't seem to need. Is the BABA Stock Price Too Low?Alibaba stock is down 23% from July 2018 highs. Yet it will likely price those shares at a discount to the current U.S.-listed price (as is usually the case with these offerings). That in turn means Alibaba shareholders will see their ownership diluted at a price well below their view of the stock's intrinsic value. (Presumably, all Alibaba shareholders, outside of passive managers, believe the stock is undervalued at the moment.)It's possible the dilution will be worth it. Perhaps Alibaba has a big deal in mind. It needs to compete against JD.com and Tencent Holdings (OTCMKTS:TCEHY) and, perhaps, the more cash the better. A wider reach for the stock -- and direct ownership, as opposed to the U.S.-based VIE structure -- can help as well.But the capital raise only adds to the doubts surrounding BABA stock as well. And while short interest here is likely somewhat overstated (there are no doubt arbitrage traders who are long Altaba (NASDAQ:AABA) and short BABA), short sellers likely will see the offering as confirming their thesis, not disproving it.In short, the beauty of the listing, like Alibaba stock, is in the eye of the beholder. Bulls see more shareholders, more cash, and a higher BABA stock price. Bears see another questionable move … and maybe even another red flag. Time will tell which side has it right.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 5 Red-Hot IPO Stocks to Buy for the Long Run * 5 Stocks to Buy for $20 or Less * 4 Dow Jones Stocks Ready to Rise Compare Brokers The post With BABA Stock Price Down, Why Is Alibaba Selling Shares In Hong Kong? appeared first on InvestorPlace.

  • Why Alibaba Group Stock Plunged 19.6% in May
    Motley Fool

    Why Alibaba Group Stock Plunged 19.6% in May

    A large shareholder is exiting, for one thing.

  • 3 Reasons the Selloff of Alibaba Stock Is Temporary
    InvestorPlace

    3 Reasons the Selloff of Alibaba Stock Is Temporary

    The last three months have understandably been tough for Alibaba (NYSE: BABA) stock. America's trade war with China has spooked investors. Alibaba is one of the largest and most visible Chinese companies, so the decline of Alibaba stock is entirely logical.Source: Shutterstock Surprisingly, despite a 17% selloff in the past three months, BABA stock price is still up 9.4% overall year-to-date. That performance is roughly in-line with the overall S&P 500. * 6 Big Dividend Stocks to Buy as Yields Plunge There are three primary issues driving BABA stock price lower in recent weeks. All three of them are temporary and have created an excellent, long-term buying opportunity.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Altaba Is Dumping Alibaba StockPotentially the biggest bearish catalyst for BABA stock in the past two months has nothing to do with the trade war. In early April, Altaba (NASDAQ: AABA) announced it planned to liquidate its holdings of Alibaba stock. Altaba is the company that remained after Verizon (NYSE: VZ) purchased Yahoo's internet business back in 2017. The holding company currently has an 11% ownership interest in Alibaba, so one of the largest holders of BABA stock is looking to sell its shares.Altaba began selling its BABA stock on May 15. As of the end of the first quarter, Altaba held 283.3 million shares of Alibaba stock. Presumably, the market will need to digest at least the vast majority of these shares in coming weeks.Even the best stock in the world would struggle to rise as tens of millions shares of it were being dumped into the market on a weekly basis. However, as Stifel analyst Scott Devitt noted, Altaba has absolutely nothing to do with Alibaba's business."While the Altaba liquidation creates additional near-term selling pressure, the event has no fundamental bearing on Alibaba and creates an opportunity for long-term holders, in our view," Devitt wrote.To take that point one step further, Altaba's shares have been an albatross for BABA stock for years. Investors knew Altaba would sell its Alibaba stock at some point. Getting the unloading out of the way could ultimately help boost the earnings multiple of Alibaba stock. BABA's Margins Trends Are ConcerningOne of the biggest bear arguments against BABA stock is that the company's margins are compressing. Its operating margins dropped from 15% in Q3 to 11.1% in Q4, which was reported last month. Its core e-commerce margins were just fine in Q4, as the unit's EBITA margin came in at 35%.However, Alibaba's staggering revenue growth comes at a high price.The company has been aggressively investing to grow its merchant base and expand its operations into smaller, more rural cities in China. It has also been investing in high-growth businesses such as cloud services, digital media and other innovative ideas. Last quarter, the EBITA margin of its cloud business was -2%. The EBITA margin of its digital media and entertainment business , by contrast,was about 50%.Not all BABA's investments need to produce hits, as long as it produces a couple of home runs over the long-term. In addition, for better or worse, its investment stage will come to an end soon."The level of EBITDA margin compression should ease in F2020 versus the ~10ppts of compression in F2019," Stifel's Devitt says. Stifel is projecting just a 2% decline in margins in fiscal 2020.While BABA's profits and margins are suffering, its investments are paying off huge in the revenue department. Its revenue was up a staggering 51% last quarter. Alibaba is often compared to high-growth U.S. tech stock Amazon (NASDAQ: AMZN). For some perspective on BABA's growth, Amazon 's top line rose just 17% last quarter. BABA Stock Is Not ChinaThe third and most frustrating reason for the weakness in Alibaba stock is that U.S. investors are using it as a proxy for shorting China. One round of tariff hikes after another is threatening the international business of U.S. and Chinese companies alike.Chinese companies that sell products to U.S. businesses and customers may be in trouble. Fortunately for the owners of BABA stock, Alibaba is a Chinese company that sells to Chinese customers. In fact, roughly 90% of Alibaba's e-commerce revenue in 2019 is expected to come from within China.Yet if the trade war hurts China's economy, Alibaba's business could ultimately suffer. However, the company's 51% revenue growth in Q4 suggests Alibaba is doing just fine so far in 2019.Despite Alibaba's relative insulation from the trade war, investors insist on using BABA stock to short China. As of March, S3 Partners analyst Ihor Dusaniwsky said $20.7 billion worth of Alibaba stock was being sold short, making it the single most shorted stock in the world, in terms of total dollar value.When the trade war ultimately comes to an end, these selling BABA stock short are going to have to take a hard look at covering their positions. Even after BABA's heavy investing, Altaba's dump of Alibaba stock and an unprecedented trade war, BABA stock is up 9.4% this year. At least three of the problems weighing on the stock are temporary in nature. Traders should take advantage of this buying opportunity while they can.As of this writing, Wayne Duggan was long BABA stock. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Sell Impacted by the Mexican Tariffs * 6 Big Dividend Stocks to Buy as Yields Plunge * The 10 Biggest Announcements From Apple WWDC 2019 Compare Brokers The post 3 Reasons the Selloff of Alibaba Stock Is Temporary appeared first on InvestorPlace.

  • Here is the 22nd Most Popular Stock Among Hedge Funds
    Insider Monkey

    Here is the 22nd Most Popular Stock Among Hedge Funds

    Insider Monkey has processed numerous 13F filings of hedge funds and successful investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find write-ups about an individual hedge fund's trades on numerous financial news […]

  • American City Business Journals

    Adaptive Biotechnologies files for $230M initial public offering

    The Seattle-based biotech company spun out of the Fred Hutchinson Cancer Research Center in 2009 and has independently raised more than $400 million in funding.