Alibaba Plunges $20 Billion - Kill Zone? (Patreon)

BABA HAMMERED

Alibaba got hammered in after hours Market Value Drop: Alibaba's shares fell by 9.1% in New York trading, leading to a loss of more than $20 billion in market value. This drop is the biggest in over a year and was triggered by the company's strategic reversal.

THE REASON

Cloud Business Reversal: Alibaba retracted plans to spin off and list its $11 billion cloud business, significantly impacting its corporate strategy. This decision was influenced by increasing U.S. restrictions on chip sales to China, crucial for Alibaba's cloud services and AI initiatives.

DIVS

Dividend Announcement: In a move to appease shareholders, Alibaba announced its first-ever annual dividend, totaling $2.5 billion. This decision came after the company decided against splitting up its cloud unit.

CASH COW:

Quarterly Earnings: Alibaba reported an 8.5% rise in sales, reaching 224.79 billion yuan ($31 billion), which just exceeded average projections. The company also swung to a profit of 27.7 billion yuan, recovering from a loss in the previous year.

AI PLAY

Strategic Challenges and AI Focus: With the recent executive changes and the U.S. sanctions affecting its cloud division, Alibaba is focusing on growing its cloud business organically. The company is also investing in AI, hosting half of China's generative AI firms, and serving about 80% of the country's technology companies.

NFA Chinese Stocks are risky AF but I may take a nibble - not sure yet - but $76 looks juicy per ATR

h/t to Sanjay for the heads up

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