Alibaba stocks also benefited from the company’s entertainment sector that saw a huge demand during the pandemic as more people stayed at home to prevent the spread of the virus.
Shares of Chinese multinational technology company Alibaba Group Holding Ltd (NYSE: BABA) has surged over 7% during Wednesday’s pre-market to trade around $270.60. Besides, BABA stocks closed yesterday trading at $251.65, up approximately 3.36%.
The spike in the Alibaba (BABA) stocks is largely attributed to the reappearance of founder Jack Ma who had been out of the spotlight for the past few weeks. According to a spokesman for the Jack Ma Foundation, Ma participated in the online ceremony of the annual Rural Teacher Initiative event held on January 20.
Ma had notably laid low after his comments last year attracted Chinese regulators’ attention. Incidentally, his comments further led to the cancellation of Ant Group IPO that was dubbed the largest public offering.
To make matters worse, the Chinese regulators have gone further and started investigating Alibaba on monopolistic competition practices. As a result, Citigroup has cited that a significant portion of wealthy investors has fled the BABA stock market.
Alibaba is the company behind one of China’s most successful online payment platforms Alipay. Incidentally, China is in the process of rolling out a digital yuan, and Alipay is viewed as a huge competitor. To put matters into perspective, Alipay overtook PayPal Holdings Inc (NASDAQ: PYPL) as the world’s largest payment platform back in 2013.
The Chinese government recently passed antitrust law particularly targeting tech companies that have a huge market presence in the country. Alibaba has a reported market valuation of approximately $672.76 billion with 2.71 billion outstanding shares. Market data provided by MarketWatch shows Alibaba shares added approximately 13% last year. However, they have dropped around 28% in the past three months, especially caused by the Chinese crackdown.
It is worth noting that Alibaba shares received an average Buy rating from 50 ratings according to MarketWatch.
In a bid to salvage Ant Group’s major public offering, Ma had previously offered the Chinese government any segment of the company whenever needed.
Alibaba group holding has significantly benefited from the ongoing coronavirus pandemic particularly its e-commerce business. Besides, the company’s cloud business boomed during the height of the pandemic as more businesses shifted to remote working thus requiring online services.
In addition, Alibaba stocks also benefited from the company’s entertainment sector that saw a huge demand during the pandemic as more people stayed at home to prevent the spread of the virus.
During the quarterly earnings results reported in November, the company reported revenues of $23.4 billion. Notably, the e-commerce segment experienced a 30% spike during the third quarter especially fueled by the pandemic.
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