In October 2020 it was worth USD 318. From there, it fell 82% towards the $58 zone. And, in recent months, it has risen more than 100%. What was remarkable was the acceleration since the beginning of 2023, rising more than 35%. What happened? Let’s see:
To explain the recent bullish movements, one must understand that much of the decline in recent years was due to political risk.
Alibaba is a company from China and was the first to be harshly persecuted and controlled by the government. has received fines greater than USD 2,600M and was seriously harmed for the purpose of controlling antitrust practices.
And now? Has the political landscape changed? is it over Chinese crackdown on tech giantss? So it seems.
guo shuqingboss of Communist Party in the People’s Bank of Chinadeclared that the two-year investigation into the technology sector will be “normalized” and that the government will support these companies to boost economic growth and create more jobs.
Also, China recently lifted its “zero covid” policy, which had hit the country hard. SIts economy is expected not to grow in the first quarter of 2023but growth picks up in the second quarter, with stronger domestic demand.
If we look at the relationship between Alibaba price and company sales (that is, how much we pay for every dollar a company generates in sales), the bottom line is that the company is cheaper than ever:
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Clearly, the market punished her for the political risk of Chinaalthough now it seems that the signs are positive.
In July of last year, he spoke about a possible recovery of the company. He commented the following: “SIf the outlook in China clears up and they adopt a freer course, Alibaba will undoubtedly make juicy profits. For now there is total uncertainty.”
The reality shows that the new statements and measures taken by the Chinese government are very positive and the outlook is clearing up. That explains the great performance of Alibaba’s shares in recent weeks.
Is now an opportunity? Yes, since the return can be interesting from these levels. But we must clarify that it is still risky. Conservative profiles, better to abstain.
To finish, I want to invite you to download a free report which I prepared with three simple secrets to discover winning stocks. I honestly think that it will be very useful for you to be able to analyze companies with potential. It has no waste. You can download it at this link: https://informes.cartafinanciera.com/
Note: The material contained in this note should in no way be construed as investment advice or a recommendation to buy or sell any particular asset. This content is for educational purposes only and represents the author’s opinion only. In all cases it is advisable to consult a professional before investing.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
