China’s Regulatory Scrutiny Causes Alibaba (BABA) To Plunge 30% In One Month


Consecutive events have caused Alibaba (BABA) to lose 30% of its market capitalization from the 27th October to 24th December. But what happened?


On 3rd November, Beijing halted the dual listing of the biggest IPO, Ant Group, a major fintech player in which Alibaba owns 33% equity.


One week prior, the founder of Alibaba and Ant Group, Jack Ma publicly criticized Chinese regulators for being risk-averse.


Last week, Chinese regulators announced an antitrust investigation into Alibaba suspecting monopolistic practices causing a 13% sell-off plunging a single trading session.


Alibaba is responding by increasing the share buyback program from $6 billion to $10 billion effective through the end of 2022. A share buyback aims at decreasing the shares outstanding, increasing EPS and hence, increasing the share price.

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