Alibaba Group Holding Ltd (NYSE:BABA)’s momentum that saw it clock highs of $120 a share seems to have cooled off. Much to the concern of investors as revelations come out indicating that the company is entangled in a tight fight against counterfeits on its platforms. During an interview on CNBC, RBC Capital analyst, Mark Mahaney, reiterated there is no need to be concerned about the recent dip as Alibaba is only showing signs common with internet stocks post-IPO.
“Generally with these internet IPO’s and I assume it is a case of most IPOs. You get such extreme volatility in the first six months 12 months we’ve seen 40-60% in most of the internet stocks off their peaks. We had that peak of $120. We’ve had a 20% correction I don’t view it as a big issue. We like the stock we still think $130 is where it will get within a year,” said Mr. Mahaney.
Mahaney made the sentiments even as Alibaba Group Holding Ltd (NYSE:BABA) online store Tmall continues to grapple with the counterfeits debacle, which has seen the company invests millions of dollars in curtailing the vice. The company has been forced to aggressively pursue counterfeits on its platform especially after going public, to avoid generating negative perception with investor’s customers and retail partners in the U.S.
The analyst remains bullish on Tmall and Taobao prospects despite the counterfeit concerns reiterating that the company is poised to generate 95% of its revenue from operations in China. Mobile adoption is expected to be key in the coming years especially with the use of Alipay that is allowing Alibaba Group Holding Ltd (NYSE:BABA) to seal a number of deals with ease.
“Just comparing how Alibaba has done in Mobile versus eBay and Amazon, Alibaba is right there with the rest of them. They are doing very solid double-digit percentage of their revenue via mobile devices, and they are getting decent transactions rates or monetization rates,” said Mr. Mahaney.
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