Entering text into the input field will update the search result below

Alibaba: This Is A Regulatory Game-Changer

Apr. 02, 2022 10:01 AM ETAlibaba Group Holding Limited (BABA)220 Comments
The Asian Investor profile picture
The Asian Investor


  • Chinese and U.S. regulators are said to near an agreement about audit inspections.
  • An agreement would pave the way for Alibaba and other Chinese companies to remain listed on U.S. stock exchanges.
  • The risk analysis just fundamentally changed.

Alibaba headquarter

maybefalse/iStock Unreleased via Getty Images

Shares of Alibaba (NYSE:BABA) surged last week on reports that Chinese regulators could allow the U.S. Public Company Accounting Oversight Board to inspect audit reports from Chinese companies with overseas stock listings. The news is a

This article was written by

The Asian Investor profile picture
I look for high-risk, high-reward situations. Five largest portfolio holdings: Bitcoin, SoFi, Alibaba, PayPal, Western Alliance. Early buyer of cryptocurrencies. I live in Thailand :)

Analyst’s Disclosure: I/we have a beneficial long position in the shares of BABA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (220)

BABA has much bigger problems than this particular regulatory risk...
Don't the wealthy sometimes mistakenly miss things on their 13Fs and it is OK if they fix it the following 13F?

It seems strange that he just doubled up by buying another 300k ADRs and that happened to be the number that were since sold?
Charlie Munger halves his BABA holdings:

Here’s one world leader ousted for openly siding with Russia re: war in Ukraine. We just may see another one later this year.

Genocide is a crime against humanity. Russian cruelty in Ukraine will continue to be broadcasted live over the internet. No sensible human being would take part of this.

very nice article.....I always laugh when NON Share Holders write Neg and bashing articles on BABA.... This article is well written and full of truth
@THEDOCTORM you brought up an extremely important point that SA should consider doing each comment should be enforcing the question of it that person actually has a stake in the company they are commenting this would help readers to see bias on either side positive bias is also high not just negative. Positive bias I noticed also is very deceiving to readers just because someone already has a stake in the company means they going to say anything good to justify their position. So both positive or negative bias right now is being commented without disclosing that the commentator has any stake in it. I know the authors of articles must disclose if they own shares so why not readers who’s comments affect others readers investing decisions ?
John_III_XVI profile picture
@sbwiad33 Your thinking is flawed. AND you did not reveal your BABA position.

Those with zero shares of BABA are just as valid with their reasons as are sheep who followed Munger over a cliff.

IMHO. ROTFLMAO... Just say'n... I love SA for the humor provided by the forum comments. I do!
Say What? profile picture
@THEDOCTORM only losers use these comments ( opinions) to make investment decisions. Anyone complaining about investor disclosure by commenters shouldn't be buying common stock.
The problem with most of Chinese companies traded in USA are more political than financial as they are own by Chinese government or Chinese government
is their majority owner.
If you like Charlie Munger(vice chairman of Berkshire Hathaway) who see nothing wrong with his company investment supporting Chinese economy and their Communist Party then sure you should invest in them because as he said" you will have Chinese government backing your investment who will not allowed them to bankrupt" .
As the old proverb says" money doesn't stink" but from other hands if you have any integrity knowing what Chinese are about (soon you will find for yourself when they going annexed Taiwan ) and their stand towards democracy and recent invasion of Ukraine by Russia maybe just maybe you should ask yourself
is this best you can do with your money?
James Allen wrote a beautiful tiny book title "As a man thinketh" in which he stated "As a man thinketh in his heart so is he"
Maybe before you're going to invest any of your money you should spent a few dollars to purchase this tiny book to discover for yourself what you're made of
and then invest accordingly to your best knowledge and consciousness.
@rczkus warren Buffett just stated in his annual report that his biggest silent partner is the federal government.

Unlike the Chinese, our country is based in capitalism roots. Our founding fathers wanted a different form of government and we listened to Adam Smith. We got lucky with the timing. If we found our country 100 years earlier, Adam Smith would not have been born.

It’s concerning that CCP’s shifting left politically.

John_III_XVI profile picture
@rczkus Watch. Their deeds tell a more accurate story than the words from their mouths. It is what they are doing; will do that matters much more than words about empty promises. They are ruled by the whims of a man; not witten law on paper.

Matthew 15:18 ESV But what comes out of the mouth proceeds from the heart, and this defiles a person.
Matthew 15:11 ESV It is not what goes into the mouth that defiles a person, but what comes out of the mouth; this defiles a person.”
¯\_( ツ )_/¯
EliasMouawad profile picture
@John_III_XVI Right. If we look what Munger, Dalio and Blackrock are doing: they are buying BABA.
There are so many issues with the CCP involvement in Chinese companies and the China/Russia relationship, that I wouldn't touch Chinese stocks on the long side with a 10 foot pole. Look at what happens to BIDU and BABA everytiime they rally 10 points or so, the buying is sold heavily.
@William_Wallace agree. The sooner the CCP changes it’s name to the Chinese Civilization Party from Chinese Communist Party the better.

Propaganda on Communism may allow the CCP to retain political control at home. But, this ideology precludes the Chinese from making friends abroad. When your best and strongest friend is Russia, then you know you are in trouble.

No amount of propaganda or marketing can turn a failed ideology into success. Communism killed 100 million people during the last 100 years. There’s nothing good about that ideology.
Am a buyer at $82; significant gap to close on daily charts
Sentiment is driving markets; patience here
Ra's al Ghul profile picture
It would leave a nice closure, if it closes in this area. . markets should reverse to the upside tomorrow . .


Rob Pinkerton profile picture
@Ra's al Ghul
Unfortunately it's sentiment that is driving the markets right now and technical analysis is not much good here. Might I suggest buying put options to protect you from any further falls. 3 month expiry date should do it.
Ra's al Ghul profile picture
faithful replica of what the Nasdaq has been doing

sandimas profile picture
@Ra's al Ghul I'm watching the SMA charts. BABA has gone from Oversold and back to its 50 day SMA. It has done this 5 times in the last 12 months! If BABA can break this trend and approach the 200 day MA, it becomes more interesting. I can wait for it to reach $150 because that means the down trend has changed. For now, no thanks - who knows how long this can last.
Ra's al Ghul profile picture
BABA recovers up to a 61.8 fibo. . Let's see if we close above the EMA20..It's a dollar and a half higher


Chris Lau profile picture
@Ra's al Ghul What's with the 5 day BABA charts? The 2-year chart suggests major losses ahead.

Shanghai's lockdown on 28 million people is going to take a massive sting out of China's GDP. At least 3.5%.
@Chris Lau Wouldn't lockdown imply they'd have to order a bunch of stuff online? Ecommerce companies did really well in lockdown situations.
@chankay "Wouldn't lockdown imply they'd have to order a bunch of stuff online? Ecommerce companies did really well in lockdown situations."

A permabear will ignore that fact. It's all perspective.
ransim7222 profile picture
"The biggest risk for Alibaba remains a slowdown top line growth longer term, especially in its e-Commerce business which is still responsible for 70% of the firm's revenues."
These are articles and Q &As from the SMCP. They are very enlightening about the very real possibility of this slowdown mentioned in the article.

@ransim7222 China will have to change its Covid strategy just as South Korea, Singapore, Australia and the likes have.

With Covid, I actually think online platforms will do much better than brick and mortar retail. Alibaba is in grocery and food delivery also. That business should remain solid.

As much as CCP wants to pursue its Marxist-Leninist ideology with “common prosperity”, the reality of economic growth will take priority. Otherwise, they would be heading towards “common poverty”. Last year, they were ahead of target because of pent up global demand from Covid. They won’t have that as a tail wind this year.

Communism killed 100 million people over the last 100 years. The sooner the CCP changes it’s name to Chinese “Civilization” Party the better it is for the Chinese people and world security.
ransim7222 profile picture
"At the time of writing, there are 60 areas in China labeled as high risks and 351 as medium risk. Together, they account for about a quarter of the economy and population. Even halting activity for a brief period could mean severe disruptions to the economy and society.
Putting a precise number to the growth shock is no easy task. There are simply too many unknowns – pertaining to the length and breadth of the outbreak, the type of containment measures employed (not all affected regions will engage in full lockdowns), and how production can be shifted across supply chains to avoid output losses.
But what is clear is that economic growth has contracted sharply in March, on a sequential basis, consistent with the weak PMIs last week. As Covid-19 woes persist, April could be even worse if more regions upgrade social and mobility restrictions. With little prospect of growth in the first half of the year, the odds of China achieving this year’s 5.5 percent GDP growth target are becoming increasingly slim."
Per the South China Morning Post today.
ransim7222 profile picture
"China can’t escape economic pain of its zero-Covid policy as case numbers rise and cities brace for lockdown
As China faces its biggest Covid-19 outbreak yet, the economic impact of the government’s strict approach will make it difficult to meet annual growth targets
There are signs the policy is being recalibrated to prepare for living with the virus, but the moderation will do little to ease growing pains in the near term"
"The economic cost of strictly adhering to a zero-tolerance approach is mounting as a growing number of cities implement lockdowns. Shenzhen put its economy on hold for a week in late March and was successful in stamping out the outbreak. Shanghai – China’s largest city with 24 million people – has been in a two-phased lockdown since last week. But significantly higher infection rates – partly due to the city’s late response – meaning that the battle may take longer to win."

Ra's al Ghul profile picture
It would be a good sign if the stock does not lose the EMA20. .

In any case, let me clarify that, in addition to these ups and downs that we see in the short term, I believe that BABA's situation has changed. . The fall that it had brought since October 2020, I think it has capitulated. .It still has to validate a firm floor to go up. .And you must always take into account the evolution of the relevant markets. .We will see now, to what extent the Nasdaq corrects. .the German Dax. . and expect also a consolidation of the recovery of the Hong Kong index. .We have to break strongly upwards the 120/122.- . . That will be a trigger without a doubt. . and ensure that the Nasdaq does not lose 12.6k. . well see

Ra's al Ghul profile picture
complicating the context for W Street and Europe. . BABA misses $110, pre-market, and could miss the EMA20. . probably need to adjust the exposure. .
Ra's al Ghul profile picture
en 2020, exactamente coincidiendo con estas mismas fechas, el papel realizó un movimiento muy similar…, tras una caída vertical y muy pronunciada. . Tres hitos que se repiten aquí. . Quizás no esté muy lejos de solucionarse al alza. .Podría cerrar el gap en 105.-, e ir buscando resistencia en 120/122.- Coincidiría con una corrección de los 38.2 del último impulso. . Algo que también hizo esa vez. Veremos si algo de eso se replica esta vez. . www.tradingview.com/...
Ra's al Ghul profile picture
If you haven't sold your position yet, please wait. . After the wheel I explain. .
Ra's al Ghul profile picture
the daily EMA20 remains, and the 110.- as supports. . but , the resistances in this zone are important . .and the big candles are the red ones and the green ones have been the small ones. . and the daily MACd, there, seeing where it defines. .


Still , a pennant , a flag pattern , could still be valid figures . .but, you must break this area to the upside

For now, the 120.- have been quite far. .and the Nasdaq could lose 14k. . I don't know how that scenario will affect her. .

Rob Pinkerton profile picture
Let's be realistic. The market pros are saying this us just a bear market rally. Look at today's performance. Maybe a good time to cut losses.

EliasMouawad profile picture
@Rob Pinkerton The Chinese gov has clearly decided to support the market. BABA will hold above $100 and a decent rally will follow.
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

About BABA

SymbolLast Price% Chg
Market Cap
Yield (TTM)
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on BABA

Related Stocks

SymbolLast Price% Chg
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.