$Alibaba(BABA)$Alibaba, as a business, is at a pivotal moment. Its management had reassured investors back in April saying that there won’t be any material change in their business due to the regulatory rulings. Yet, they had acknowledged in August that they were still studying the impact of these regulatory rulings.
We are in the process of studying the regulatory requirements, evaluating the potential impacts on our relevant businesses, and we will respond positively with actions.
This discrepancy raises the possibility that Alibaba management’s reassurance may have merely been an educated guess at the time and its business might actually deteriorate in the months to come. This piles on to a myriad of other risk factors surrounding Alibaba. Therefore, risk averse investors may want to avoid Alibaba stock until its management provides clarity on their upcoming earnings call, regarding how exactly has its business been affected by the regulatory interventions. Good Luck!
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