After the Chinese regulator announced on Thursday (24th) that it launched an antitrust investigation on Alibaba, Alibaba’s ADR closed down 13.34% to 222 per share on Thursday. USD, Entered a bear market, the lowest closing price since July 1.
The State Administration for Market Regulation said on Thursday that it will carry out investigations into suspected monopolistic activities such as “choose one out of two” in accordance with the law. The Chinese financial authority will meet again with Ant Group in the near future.
Aaron Kessler, an analyst at investment bank Raymond James, wrote in a report to clients that we were not surprised by the investigation in China. The most likely outcome is the termination of these exclusive partnerships, although it is difficult to quantify the potential revenue impact.
Aaron Kessler reiterated the “Strong” buy rating on Alibaba since February 2018, with a target price of 330 USD。
Since October 27th Alibaba (BABA-US) The closing price reached 317.14 USDSince it hit a new high, the stock has fallen into a bear market with the surge in selling, and the current stock price is about 30% lower than its historical closing point.
Kessler said that investors have largely digested concerns about the investigation given the stock’s sharp decline from record highs. Therefore, at such a low level, we are still buyers.
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