Internet giant Alibaba has taken a substantial hit this week when its stock price dropped by 5%. The stock closed at $73.38, the lowest since the 2014 NYSE IPO. The company reported a 28% increase in earnings, but this was below market expectations. Analysts say Alibaba is faced with the slowing of the Chinese economy and stiff competition from rival Internet companies Baidu and Tencent.
Alibaba founder Jack Ma’s personal fortune is said to have declined $752 million with the fall of the stock price. To reassure investors, the company has agreed to a $4 billion buyback and the founder and current executive vice chairman say they will not sell their Alibaba shares.
On a positive note, the company seems to still have an appetite for expansion. They will invest $4.6 billion in Chinese electronics retailer Suning. This will give Alibaba access to a ready-made distribution network to increase speed of delivery in the Chinese market. Ma says that he takes the long view on this situation.
(Report compiled from Web sources)