Alibaba (NYSE: BABA) had started their journey as a dream with quick profits and immense success at their heels. The firm soon became a mega-corporation in China as soon as they began their business enterprise.
Although the company enjoyed booming business for the past few years, they have witnessed some massive decline in recent months. In fact, BABA stock has dropped considerably in the stock market and analysts are keeping a close watch on their share prices.
Hurdles For BABA Stock
Recent trading of the stock experienced a decline in their share prices to a new low since the month of June this year. This decline has been quite shocking since the online shopping companies have been exploding with profitable ventures throughout the COVID-19 pandemic.
It has been reported that the stock is becoming bigger and out of control for the regulators. The regulators of Beijing are trying to take a very dark view of the threats than the others. Alibaba has lost almost 13% of its value during the trading period on Christmas Eve. They started that day with a decline of 3%. Later on the day, they did recover and the stock stands to be $220.03 presently.
6 months back, the stock had 1 ‘hold’ recommendation, 25 ‘buy’, and 1 ‘strong-buy’. 3 months ago, they had 28 ‘buy’ while now they have only 23 ratings of ‘buy’. The price objective is $314.63, the same as last month. Barclays raised the price objective to $365 on 9th November.
Alibaba has a diversified business and has expanded its operations which is no longer considered safe. Alipay and other expansion in healthcare operations are facing tough competition.
Although investors are flooding in resulting in a buyback program of $6B, Chinese regulators are unhappy with the latest IPO operation. There are a few possible pitfalls approaching BABA stock that needs to prepare to tackle losses and hurdles.