Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Alibaba Group Holding Ltd (BABA) Might Trip On Its Way Up, But Doesn’t Need A Safety Net Yet

Alibaba Group Holding Ltd (NYSE:BABA)’s price is beneath the $89 value per share and seems to be more or less stabilized at this spot. The company has seen its stock devaluate by 6% since the opening date and there’s a temptation to short-sell its shares in the hope of ripping some profits. Bloomberg’s Cory Johnson suggests avoiding such risky maneuvers with Alibaba Group Holding Ltd (NYSE:BABA)’s financial instruments. 1

He supports this opinion with the fact that the company has its upcoming quarter “baked in” as they might intentionally set expectations lower to exceed them in order to Wall Street with this. Then, Alibaba Group Holding Ltd (NYSE:BABA) had a huge influx of liquidity which might serve as a safety vest if something unexpectedly jumps in, thus hedging for the longer run. Meanwhile, making precise predictions about the stock is practically impossible and those that expect spikes anytime soon might be unpleasantly surprised by how the stock price behaves.

“I think that fundamentally this is a very expensive stock right now and it’s a business that’s slowing down in some meaningful ways. Yes, it’s growing, but there are some misperceptions about the stock. For example, there’s a perception that their business outside of China is responsible for a lot of their growth in their future growth,” said Cory Johnson.

He further added that Alibaba Group Holding Ltd (NYSE:BABA)’s share of revenues coming from outside China is shrinking comparably to the money coming into the company from the local market. It may be a sign that it will be tougher to compete with already established companies like, Inc. (NASDAQ:AMZN) or eBay Inc (NASDAQ:EBAY) or that advertising and e-commerce is already functioning properly, deeming Alibaba Group Holding Ltd (NYSE:BABA)’s presence as practically unnecessary.

Disclosure: none

Warren Buffett and BillionairesFree Report: Warren Buffett and 12 Billionaires Are Crazy About These 7 Stocks

Let Warren Buffett, David Einhorn, George Soros, and David Tepper WORK FOR YOU. If you want to beat the low cost index funds by an average of 6 percentage points per year look no further than Warren Buffett’s stock picks. That’s the margin Buffett’s stock picks outperformed the market since 2008. In this free report, Insider Monkey’s market beating research team identified 7 stocks Warren Buffett and 12 other billionaires are crazy about. CLICK HERE NOW for all the details.

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!