Alibaba Group shares at lows: risks for investors

The quotes of the Chinese technology giant Alibaba Group Holding Limited (BABA) fell by over 60% from 52-week highs. The reason for this is the high risks that the company has recently faced should note that at the end of 2020, Chinese regulators drew attention to large Chinese technology companies, including Alibaba Group.

Investors assessed this negatively, which led to the sale of BABA shares. In addition, today, geopolitical uncertainty creates additional risks for the Alibaba Group, which can lead to disruption of cross-border supplies. In recent weeks, another serious problem for the Alibaba Group has been the return of covid restrictions, because of another outbreak of the disease in some major cities. Alibaba Group, which still keeps the status of China’s e-commerce leader, is facing increasingly serious competition from JD.com and Pinduoduo, especially after the Chinese government started introducing antitrust rules last year.

As a result, Alibaba showed moderate growth in its core business last quarter, while JD.com recorded an increase of over 20%. Thus, Alibaba Group investors should consider all the negative factors that may affect the quotes of the e-commerce giant in the future. At the end of last week, the company’s shares could rise slightly, even at the level of decline in the main indices. The reason was news from China, where the Securities Regulatory Commission held a meeting with members of the country’s major banks, insurance companies and social security funds and urged these large domestic investors to buy shares of Chinese companies.

This was because the Chinese lost about $2.7 trillion and actually returned to the levels of the summer of 2020. Probably, some investors really started buying shares of Alibaba Group after this meeting, which allowed them to finish trading on Friday, April 22 with an increase of almost 0.6%. At the auction on April 25, BABA’s stock was worth $85.84.