It comes as no surprise to anyone that the stocks of BABA, the Chinese MNC for online retail, are down by about 13% the current month. And fingers are being pointed at Ant Group, the financial arms IPO of the company, for the delay as well as a dip in the stocks of BABA. As news would have it, the delay is simply a result of a clampdown on the lending activities of Ant Group.
How Has BABA Found Itself in This Entire Crisis?
Interestingly, the stocks of BABA got affected by this, because Ali Baba owns at least 33% of the stocks in Ant Group. Goes without saying, the negative review received by Ant Group, and the rumors spreading the company are severely affecting the stocks of BABA stock. But, it is expected that Ali Baba would exit this crisis gracefully.
Right now, investors have a field day as they can scoop up several stocks of the company at a discount. The stocks of BABA are currently trading at around $276, which is around 13% lower than the value it had the previous October. Most of the estimates from analysts report that usually, the stocks of this company are 22% higher than the price it is currently trading at. Also, the PE ratio for the company has been fixed at 24.4, which is quite low- for the average is 292.
Interestingly, the stocks of this company always seem to be being undervalued, despite the earnings they keep posting every quarter.
And since most investors have been looking at progress in the revenue of the company, the predictability in the bilateral policies between the US and China might actually put BABA above dangerous waters. Also, with the shopping festivals launched by the company, it is sure to draw in millions of consumers.