Shares of Alibaba Group Holding Ltd. collapsed on Thursday to its lowest close in nearly six months after Chinese regulators launched an antitrust investigation into the e-commerce giant.
An objective of the investigation was Alibaba’s policy of “choosing one of the two”, which requires Alibaba’s business partners to avoid relations with competitors, as reported by the Associated Press.
“[W]We are not surprised by the announcement of the survey, “analyst Aaron Kessler told Raymond James in a note to clients. consumers who transfer purchases to other platforms). “
Kessler reiterated the strong purchase rating he had on Alibaba at least since February 2018.
Alibaba shares BABA,
fell 13.8% in morning trades and was heading for its lowest close since July 1. Shares are expected to suffer the biggest one-day decline since the IPO in September 2014, as the current record decline is 8.8% on January 29th. , 2015.
Do not miss: Alibaba shares post the worst day of 2015 after the suspension of the IPO Ant Group.
With the sale, the shares moved into the bear market, which many on Wall Start mark as a decline of 20% or more from a significant peak. The stock was currently 30.4% below its record close.
Since closing at a record $ 317.14 on October 27, shares have closed up 19.6% to $ 255.11 on December 15, before halting some losses to close at $ 256 on Wednesday. $ 18. A close at or below $ 253.71 would make the bear market “official”.
Kessler said he was of the opinion that, given the sharp drop in the stock from a record level, investors were already “setting prices largely” for concerns about an investigation. As a result, we “remain buyers” of Alibaba shares at current levels, he said.
Kessler has a price target of $ 330 for Alibaba shares, which is 49.5% above current levels.
Shares have fallen 18.2% in the last three months, while the iShares MSCI China fund traded on the MCHI exchange,
gained 8.2% and the S&P 500 SPX index,
gained 13.9%.