How Can We Deal With A Series Of Bad News?

At the end of last week, Alibaba's stock closed at $68.18, which is already close to the red line of issue price.

Last Thursday, Twitter also fell below the 2013 issue price on NASDAQ IPO. If Alibaba and the technology stocks, which are unable to get stable revenues and continue to be weak, continue to take the same road, they will undoubtedly embarrass the dealers and investment banks who have been trying to grab Ali stock.

In the past two weeks, Alibaba has received a lot of bad news. Perhaps the most serious one is Soros, who also bought shares at the beginning of the year, and is now selling Ali.

In the past three months, the Alibaba stock held by the Soros family fund has been reduced from 4 million 390 thousand shares to 59 thousand and 300 shares, with a reduction of up to 98.7%, according to the documents issued by the family fund in August 15th. Another report released in early May showed that ThirdPoint and Paulson Paulson&Co., the hedge fund king, had also polished Ali shares in the first quarter of this year.

Three days before the announcement, the company has just delivered a quarterly report that disappointed investors: revenue grew by 28% compared with the same period last year, and China's retail sales increased by 34%. These two key indicators were lower than the average forecast of previous analysts and the slowest growth in three years.

In the 6 month of this year, Ali warned analysts that the sale of lottery tickets online, the introduction of small and micro financial businesses to the ant gold service group and the reduction of Juhuasuan platform fees will have an impact on the revenue of the quarter. According to the group CFO, Mr Wu Wei, at the analysts' conference call, if the impact is eliminated, the company's revenue should grow by about 36% over the same period this year.

In announces the two quarter, Ali also proposed a $40 billion stock repurchase program funded by Chairman Ma Yun and vice chairman Cai Chongxin. Such remedial measures have a stabilizing effect on the company's share price theoretically, but the disappointment of Wall Street may be more serious than that of the two of them.

In August 12th, Alibaba's stock price dropped to $71.03, which is close to the $68 issue price proposed by the company at IPO last year. In fact, the opening price of Alibaba listed on the first day was as high as 93.89 dollars, and the first day of opening was up nearly 40%.

If the current stock price of Ali is close to that of last November's close to US $120, Alibaba's share price has dropped by nearly 40%. This decline far exceeded the Dow Jones index or the S & P index's decline in the same period. At present, the heavily hedge fund and mutual fund of Ali are losing money.

Last year, Alibaba executives told international investors that the company's future success will depend on three factors: the growth of China's Internet users, the prosperity of online shopping and the rapid growth of China's economy, IPO executives said.

But now, these factors are facing challenges to varying degrees.

　 Why is Ali abandoned by Soros?

Soros is regarded as an investment guru who can be equal to Buffett. In 2014, his hedge fund earned $1 billion 200 million from the trading market, relying on its keen judgement of the market.

Soros's attention to the Chinese market has always been low, but this time he was sold out. Alibaba In addition to the stock, there are also Baidu, and the selling ratio is as high as 87%. The abandonment of these two stocks may imply that Soros, like many other analysts, believes that at least for some time in the future, China's economy will continue to tumultuous downward, resulting in an overall decline in household consumption.

In 2014, China's GDP growth rate was only 7.4%, the lowest in the past 24 years. In the 2015 year, the domestic stock market recovered, absorbing many people's original consumption funds, but then was plunged into accounts by several plunging.

"I confirm that macroeconomic is an aspect of overseas investors' concern." 86 securities analyst Sean Zhang said to the Wall Street journal, "in the past month, I have done some roadshows in New York and San Francisco, and many people have asked me about this. This shows people's concerns about China.

"Our business and development strategies are based on long-term goals, and short-term turbulence will not affect these long-term strategies. Consumers on the platform of Ali, not only for clear shopping purposes, but also enjoy a lifestyle. So we will pay close attention to the economic trend and consumer behavior in the short term, but we have confidence in the long-term development of the company. At the conference call, group CEO Zhang Yong responded to UBS analyst's questions about China's economic impact.

"Since the beginning of this spring, the management of Alibaba has no longer simply pursued the rapid growth of earnings figures, but rather concerned about how consumers can have a smooth, diverse and satisfying consumption experience on Taobao, Tmall and other platforms, and to maintain the business interests that can bring long-term impetus to Ali Ping Tai, that is, more healthy sales and revenue."

"For Wall Street that pursues high growth in key data, this will definitely cause big fluctuations in share prices, but I do not think executives will be too concerned about this." An analyst close to Alibaba said to the curiosity daily.

　 The renminbi is not worth the money. What will happen to the buying and selling of Chinese people?

Recently, the yuan has also suffered a sharp depreciation of nearly 5%. Not only is the global stock market and foreign exchange market affected, but those companies that have done great business in China are also suffering losses, including Intel and Apple Corp, and a series of luxury companies that we have analyzed before.

Exchange rate is an old problem for luxury goods, unless the RMB exchange rate continues to fall sharply, otherwise the impact will not be great. But for consumer goods that are not worth keeping, the problem is not so simple.

A very direct question is: Tmall international, which is busy bringing all the world's major brands back to China in the past year and recommending to consumers to enhance the quality of life, will this time lose some price sensitive customers?

In 2014, the 2 Tmall month was officially launched as a platform for direct supply of overseas goods to Chinese consumers. This platform is aimed at a group of emerging "upper middle class" consumers: they need more than just daily necessities, but lifestyle and quality of life; not price sensitive, but at the same time pursuing cost-effective.

The emergence of Tmall international just helped them complete a large scale of consumption radius on the computer or mobile phone screen.

For consumers who can afford to consume, only those who occasionally try Tmall's international market, the price difference caused by exchange rate has a simpler solution: buying back the replacement of common commodities.

According to a survey by Reuters in early 2015, Chinese consumers began to curb spending on non essentials, and more people began to choose cheaper products.

"My personal judgment is that people who originally wanted to spend 600 yuan on Tmall international brand clothes now spend 640 yuan on him, but there is no big problem. If the dress is just needed, he must buy it, or spend 500 yuan or even less for the domestic brand. At this time, Tmall, Taobao and other platforms still have advantages. In short, the retail market is likely to be back and forth in the same market now. The analysis closer to Alibaba said to curiosity daily.

Apart from retail, the fact that the exchange rate will be more affected will also involve bulk commodity purchases. Wholesale trade Industry, which is also the development business of Alibaba. At present, you can still see these two wholesale businesses in the Alibaba's earnings report, but together only account for 11% of the company's total sales, which means that Ali has not made much of these businesses now.

Ali's future trouble may also come from Jingdong.

In the overall slowdown of economic growth and consumption of funds is no longer as ample as before, Wall Street investors consider another factor is: outside the Alibaba, there are still shares in Jingdong, jumei.com, vip.com and other electricity providers in the US stock market, how to choose from them?

On the whole, China is already the largest online consumer market in the world. According to the statistics of AI consulting, in 2014, Chinese people created a total of 28200 billion online transactions, of which nearly 60% of them went to Alibaba's Taobao, Tmall and other platforms.

But Jingdong is gradually narrowing this gap: as the 3C field gradually extended to all categories, and began to layout in cross-border, Shang Chao, fresh and other businesses, in 2014, the total sales volume of Jingdong was 40% of the total turnover of Tmall, which was only 21% in 2013.

In view of the rapid growth of Jingdong, you can see from the three actions of Ali in the first half of 2015, the intention of counter attack is:

The first is Tmall's "promotion in mid year".

6 years ago, Tmall, also known as Taobao mall, held the first "double 11" Shopping Festival. Jingdong soon put forward its own "618" shopping festival for the "double 11", and constantly attracted the participation of other e-commerce platforms smaller than Ali and Jingdong.

In the past few years, Tmall's counterattack against "618" was not strong. But in June this year, Tmall held a "month to year promotion" with a variety of themes for a month.

The two is Ali's huge cooperation with Suning recently.

In August 10th, the Alibaba announced its strategic cooperation with Suning, making it the second largest shareholder with 283 billion yuan, focusing on its offline stores and logistics system. Considering that Jingdong's core business is also selling electronic products, this cooperation almost turns the two sides into a direct competition.

Three, UNIQLO withdrew its official flagship store from the Jingdong.

Recently, the Wall Street journal revealed that the reason behind UNIQLO's withdrawal of its flagship Jingdong was due to a personal communication from Ma Yun to CEO, Ryui Masa of UNIQLO's parent company. According to people familiar with the matter, Ma had mentioned that if UNIQLO could enhance its loyalty to Alibaba platform, Ali would bring more traffic and sales volume to Tmall flagship store of UNIQLO.

Three months ago, when UNIQLO entered Jingdong, a series of resources including exclusive warehouses were obtained. UNIQLO said that the reason for the withdrawal of Jingdong is in Jingdong platform. Sale Goods do not conform to their e-commerce strategy. Jingdong said that the withdrawal of UNIQLO has nothing to do with its performance, because demand is very strong.

In short, at least from the stock price point of view, the first half of Alibaba has not been as comfortable as it imagined: in the face of the same downward trend in consumption due to the economic situation, it has to compete with the stronger Jingdong and more smaller e-commerce platforms to compete for the already saturated online sales market in China.