Alibaba Group Holding Ltd
On November 12, 2015, Alibaba may have managed a record of $14.3 billion in sales on Single’s Day, the Chinese holiday, but its shares decline for the 2nd straight day on that day.
On November 11, 2015, shares of Alibaba closed down 2% to $79.85 in spite of beating the 2014 Singles Day record of $9 billion in sales before lunchtime in China. On Thursday, shares traded down another 1% to $79.01 on heavy volume, dragging them down 33% from a year ago.
Even though two occurrences are not considered a trend, but this is the second time in Alibaba’s fourteen month history as a public company that shares have increased in the weeks leading up to Singles Day and then fell immediately after.
The day before Singles Day of 2014, the stock hit an all time peak of $119.15, following a 39% build up of its shares from mid October to Nov. 11. It declines 3.8% of Single’s Day, and then grieved a six-month long weakening through April of 2015.
In 2015, Singles Day, the stock increased 49% from a record low of $57.39 on Sept. 28 to a high of $85.40 on Nov. 4, then decline 2% on Singles Day.
The share price weakening could be partly credited to profit taking and a peak level of short interest, which has beyond doubled YoY. The company is also dealing with increased rivalry in China from JD.com.
However, it can’t be all that bad for Alibaba because this August 11, 2016, China's Alibaba Group Holding Ltd released its best revenue development ever since before the e-commerce giant's listing in late 2014, increasing its shares to their peak level in a year.
For the quarter ended June 30, 2016, Alibaba produce additional money from mobile shopping than from PCs for the 1st time, as well, assisting to increase its shares up by over 5% to $92.10 in New York, its peak level in over a year.
In spite of gross merchandise volume development staying low compared to prior years, increasing 24% to 837 billion yuan, Alibaba is squeezing extra money out of its e-commerce business, primarily from advertising. That interpreted to quarterly revenues of 32.15 billion yuan ($4.84 billion), a 59% leap from the prior year and the highest progress rate since late 2013.
After a remarkable change post earnings of over 12 percent shares, Alibaba Group Holdings are finding it hard to maintain the gains. With Alibaba stock no longer cheap basically, and with satisfaction at a highest, it is expected for Alibaba stock to trace again some of the current big improvements.
Conclusion: It is important to remember that while earning did increase, the P/E ration multiple extended by even a greater degree. With Alibaba stock now trading at approximately a 22 P/E multiple, it is now at the peak valuation level in almost a year.
This 2016, Singles Day online shopping bonanza is another interesting event and number to look forward to. If Alibaba can keep its speed it will surely break the US billion in sales mark.
It is highly anticipated that the big thing to watch again this year will be mobile sales, because Alibaba has seen its overall revenue driven mainly by mobile sales. It is extremely possible that the trend will carry on into the company’s 2016 Singles Day outcomes. Alibaba Mobile monthly active users increased 39% to 427 million, up 17 million from the previous quarter.
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