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Tuesday, January 26, 2021

Baba Stock: Ant IPO Adversity May Be The Beginning Of Troubles

Alibaba (NYSE: BABA) has been witnessing a bullish trend for a considerable amount of time. However, things have turned ominous for the development of regulations that might make things more difficult for the improvement of Baba stock.

This note has no intention of implying that Baba stock is going through any terrible existential risk in the stock market. Alibaba is doing a great job and has retained a stronghold over the Chinese market. What is more promising is that the country is doing incredible in its economics department since the oncoming of the COVID-19 pandemic. Their economy has been resilient and recovering at great speed.

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The shopping festival for 24-hour which is Singles Day is a great example. This important event proved to be immensely successful and garnered a whopping $74.1 billion with the help of the entire volume of gross merchandise. This is bound to overshadow Black Friday, Amazon Prime Day, and Cyber Monday.

The largest beneficiary of this Singles day was undoubtedly Baba stock. It is noteworthy that Baba stock functions a huge e-commerce platform called Taobao and Tmall. Both these virtual retail stores manage to pull in a Monthly Active User number of 881 million through mobile phones.

Let’s not forget that Baba stock is not all about e-commerce and has several other branches of business enterprises. They have a successful business of cloud computing that garnered 60% annualized growth with $2.2 billion in the previous quarter. Their Digital Media & Entertainment enterprise witnessed a huge surge of 45% daily subscribership within the last quarter itself.

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All these reasons have been the key factors for the continual growth of Baba stock at such a rapid pace. The revenue of the company was $22.8 billion which was increased by approximately 30%.

Failure Of Ant IPO Impact On Baba Stock

Ant Group was founded in 2004 as a branch of Alibaba by Jack Ma himself who created Alibaba.

Ant offered several services including microloans, savings accounts, markets funds, credit scoring, and insurance policies, and so on. AliPay was developed for instant mobile payments by scanning QR codes.

Ant Group became the powerhouse of fiscal development in China with over 711 million users and is expected to raise more than $34 billion.

As the contract was about to be sealed, the Chinese government interposed for fear of a monopoly in the market. Xi Jinping, President of China, took the final call regarding the future of Ant Group.

Following a discussion between the President and Jack Ma, the latter made some accusations and controversial comments regarding the government’s policies of fiscal services and development.

There are numerous regulations for anti-competition put in place by the government of China. These guidelines might surely make an impact on the Ant Group’s future which holds the equity of almost 33% of Baba stock.

However, Alibaba is a profitable venture for shareholders and investors. 

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