Alibaba's Stock Price Cut Is Even Worse.

Although Alibaba immediately responded to the doubt that the share price will fall again, it can not change the reality of its stock price continuing to drop.

Since the beginning of 2015, Alibaba's stock price has fallen by nearly 40%.

In the key period of listing 1st anniversary,

However, it is facing a grim situation of 30% market capitalization, and the market's doubts about its stock price will be even worse.

In September 19, 2014, Alibaba launched the largest IPO in the history of the US stock market on the list of $68 / share issue on the NYSE.

What is more alarming to the market is that Alibaba's stock market surged 38.07% on the first day of its listing, and its market value was as high as 231 billion 439 million dollars, becoming the second largest Internet Co after Google.

In the 2 months since then, Alibaba's share price has surged forward, reaching the highest price of US $119.15 / share in November 10, 2014, with a cumulative increase of 75%.

Then, the good times never last long.

The big rally ended abruptly and plunged into a long-term downward trend.

In August 24, 2015, Alibaba was still unable to cover up the decline after its first fall below the issue price. In September, the 11 daily newspaper closed 64.63 dollars / share, down 45.76% from the highest price.

According to this calculation, Alibaba's latest market value is US $161 billion 284 million, which has shrunk by over 30% over the first day of listing.

Ali questioned by stock price

Despite a brief rally in Alibaba shares last week, it is still difficult to change the investment institutions' expectations of downgrading their stock prices, or even be challenged by stock prices.

Swiss bank (UBS) lowered the target price of Alibaba from $101 to US $93, and slightly reduced the total volume (GMV) expectation and revenue expectation of short-term commodities, and raised the risk premium of Alibaba at the same time.

Pacific Crest Securities, the international investment bank, has lowered the Alibaba's target share price from 94 US dollars to 80 US dollars in consideration of the macroeconomic downturn and emerging market exchange rate fluctuations, and further reduced its expected growth in the 2016 and 2017 fiscal year (GMV).

The Alibaba also made the same expectation for the expected reduction in the volume of commodity pactions.

Alibaba said that due to the weakness of China's consumer spending, the GMV in the second quarter of 2016 is expected to be lower than originally expected, with a median of one percentage point.

The cover article published by Barron weekly in September 14th says that based on the comprehensive consideration of China's economic difficulties, the increasingly fierce competition in e-commerce and the strengthening of the government's review of the culture and governance of Alibaba, the Alibaba share price may fall by another 50%.

In response, Alibaba spokesman Bob Christie responded on the same day that the article was "inconsistent with the facts, out of context, and the reporter's conclusions were misleading" and complained to the editor of Barron's weekly.

Ali reasons for the fall

Although Alibaba immediately responded to the doubt that the share price will fall again, it can not change the reality of its stock price continuing to drop.

Since the beginning of 2015, Alibaba's stock price has fallen by nearly 40%.

On the whole, Alibaba's share price continued to suffer from a combined impact of many factors, including slowing China's economic growth and less than expected performance.

Among them, China's economic slowdown caused by the market's macroeconomic concerns is a key issue, which has a major impact on Alibaba, including the stock.

In recent years, the growth rate of China's economy has changed from double to single, and now it has put the "seven guarantee" in the first place, and the economic growth rate has slowed down obviously.

The US market generally reduces the valuation of the stock market. Even if the performance is acceptable, it will still be skeptical about the growth of China's stock price based on the judgement of the future economic slowdown.

For Alibaba, more than half of its revenue and profits come from the Chinese market, which is more obvious than the Chinese economy.

Ali made clear in the quarterly report that due to the slowdown in China's current economic growth, the company's revenues and profits may be "greatly adversely affected".

According to the financial report, Alibaba's operating income in the first quarter of fiscal year 2016 was 20 billion 245 million yuan (US $3 billion 265 million), an increase of 28% over the previous year, lower than the previous US $3 billion 390 million expected by Wall Street. Based on non GAAP, net profit Rose 30% to 9 billion 496 million yuan (US $1 billion 532 million) over the same period last year, while the total retail trade volume (GMV) in China's retail market increased by 34%, reaching a new low of three years.

From a single point of view, Ali's performance is not bad, but due to the growth of performance is not as expected, the market has a greater response.

On the day after the release of the quarterly report, Ali shares fell 8%.

In addition, more stringent regulatory requirements are also one of the reasons leading to the fall of Ali's share price.

At the beginning of 2015, SAIC accused Ali's network pactions of 5 major problems. The SAIC investigated Ali fakes' incidents and continued to ferment.

However, it is worth noting that from the price earnings ratio of China Internet Corporation three giants, Alibaba,

The Tencent's price earnings ratio is 25 times, 24 times and 31 times respectively in 2015.

From this point of view, Alibaba shares still do not rule out a slight increase in space.

We should wait and see what the future of Ali's share price is.