Alibaba Shares Tumble Despite Record Singles’ Day Sales

Alibaba Group Holding Limited (NYSE:BABA) did great on its Singles’ day sales record again on Friday, but the investors were not interested about it as the stock were trading more than 3 percent lower on Monday. The Chinese e-commerce giant only used 20 hours to break its sales record from last year. It recorded total $17.8 billion worth of gross merchandise volume in its 24-hour e-commerce sales event in 2016.

“Back in 2013, $5.14 billion was our one-day GMV. Now we can achieve it in one hour,” Alibaba Group CEO Daniel Zhang told the company’s live blog earlier in the day. But the amazing number didn’t translate into equity gains. The stock dropped as much as 3.46 percent to $89.77 on Monday. The shares were trading 10 percent lower since the company posted its quarterly earnings report on November 2.

“In China, shopping is entertainment,” Duncan Clark, chairman and MD of the business advisory BDA China, said. “A lot of people [in inland cities] are tuning in to live broadcasts for products. Hundreds of thousands of people follow internet celebrities who use these platforms to sell.” Trump election victory may raise concerns on Alibaba’s U.S. growth ambitions. Analysts said Trump’s policies on trades with China could hurt Alibaba’s Tmall sales in China.

“Given the direct and indirect risks, the election probably has the greatest impact on Alibaba more than any Chinese internet business,” said Gil Luria, an analyst at Wedbush Securities Inc. “If there are disruptions in trade, it would impact the willingness and likelihood of U.S. brands and retailers to take an active part on Tmall.”

What’s more, it seems that U.S. investors don’t trust Chinese companies. They are worried about the slower economic growth in China. They also don’t believe Alibaba’s VIE structure, which are used for Chinese companies to be listed in U.S. stock market. Investors also have feared Alibaba’s accounting irregularities since the stock went public. The company now is still under investigation by the SEC.

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