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Alibaba (BABA) stock price is down as the e-commerce giant expects that its revenue growth will slow this year due to the coronavirus pandemic.
Alibaba Group Holding Ltd (NYSE: BABA) stock price is down. BABA stock price fell by 5.87% to $199.70during the last trading session on Friday. This comes as growth has slowed for the e-commerce giant. This slowdown has been linked to the coronavirus.
Sources said that Alibaba has forecasted slow growth for this year. The trading group projected sales of about 650 billion yuan ($91 billion). This is about 35% below analysts’ estimates. There was an improved performance in March though. Quarterly revenue rose 22% to 114.3 billion yuan. This represents the slowest historical growth rate for the company.
Alibaba (BABA) Stock Price Fell on Friday
Though the Alibaba (BABA) stock price is down, the company’s management had indicated that online shopping was on the rise again. The COVID-19 pandemic seems to be a formidable foe for the Chinese economy though.
Apart from this, Alibaba has other concerns. The rise of competitors like Pinduoduo Inc (NASDAQ: PDD), Tencent Holdings Ltd (HKG: 0700), and JD.Com Inc (NASDAQ: JD) are all encroaching on Alibaba’s business units.
These competitors are improving in terms of market share. Though, they haven’t made a dent in Alibaba’s leadership of the different markets. This though shows that the competition is catching up and fast. Alibaba’s market value has dropped by about $70 billion since the COVID-19 situation first started.
This and an uncertain future for the global economy are all playing themselves out in Alibaba’s business.
Sino-American trade tensions are also a source of concern. Alibaba had gone out of its way on Friday to calm tensions. The tensions were concerning a new American bill that is after closer inspections of Chinese companies. Should improprieties be found, Chinese companies could face restrictions from the US capital markets.
This comes as the Chinese State Councillor and Foreign Minister Wang Yi have accused the U.S. of stoking Cold War Tensions.
Alibaba’s Management Assures Everyone
Maggie Wu, Alibaba’s Chief Financial Officer said during a conference call:
“The integrity of Alibaba’s financial statements speak for itself, we have been an SEC filer since 2014 and hold ourselves to the highest standard. We will endeavor to comply with any legislation whose aim is to protect and bring transparency to investors who buy securities on U.S. stock exchanges.”
The drop in Alibaba stock prices has been reflected in a $1.5 billion ax of founder Jack Ma’s fortune. The 56-year-old is still pretty wealthy though. Ma is the world’s 22nd richest person at $41.3 billion. He is also 2nd in China, after Tencent’s CEO Ma Huateng at $46.4 billion.
As the COVID-19 pandemic continues, the situation is certain to be topsy-turvy. Alibaba seems is poised to wade through the murky waters. That is in Jack’s absence.