BABA

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Alibaba has soared to stratospheric new heights this year, winning over plenty of new fans along the way. The legion of admirers now includes a handful of influential hedge fund managers, as well as the lion's share of research analysts covering the company. But as is usually the case with something wildly successful, the Chinese e-commerce giant has its fair share of haters. And those detractors have manifested themselves as short sellers, betting billions on the downfall of Alibaba's shares.

Alibaba is dividing Wall Street - Business Insider

The U.S. stock market is overbought, and the weak seasonal period is upon us. Overbought markets look for excuses to sell off. Please see “Will Trump’s lack of leadership become an excuse for a big selloff in stocks?” If the momo (momentum) crowd that has been running up this market panics and their panic results in a big spike down, it may create buying opportunities in many stocks. I often get asked: “What is the one stock to buy if the market dives?” Even though I advocate a portfolio approach, this is a legitimate question. Alibaba BABA, +2.18% stock is the one to buy. First and foremost, let me disclose that Alibaba stock is in the model portfolio of ZYX Buy Change Alert of The Arora Report, and there are nice unrealized gains on the stock.

This is the one stock to buy if the stock market crashes - MarketWatch

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Chinese internet regulators are planning to buy 1% stake in Chinese tech firms including Youku Tudou which is a part of Alibaba. They also want a seat on the company board and a greater say in company operations. This state interference has unnerved some investors but its impact on Alibaba should be marginal. Alibaba’s revenue pie from media segment is very small whichshould limit the headwinds due to these policies. Negative impact of these policies on Alibaba’s stock pricewill be negligible and investors should focus on the long term growth potentialof the company.

Alibaba: Impact Of New Government Policies On Investors - Alibaba Group Holding Limited (NYSE:BABA) | Seeking Alpha

Earlier this year, Alibaba launched its e-commerce platform through its subsidiary called the Paytm Mall. Paytm Mall was separated from the original payments entity called Paytm which held a 68% market share in the Indian payments space. Now, one could say that this is a few years too late. I did too. But in the recent festive season, it claimed that it already had a 20% market share in e-commerce. Obviously at the moment it is just a claim as every retailer makes unverified claims of a dominant market share this time of the year.

Amazon, Alibaba Renew Battle In A New Geography - Alibaba Group Holding Limited (NYSE:BABA) | Seeking Alpha

Part of a wider push into offline retail, Alibaba (NYSE:BABA) will invest $2.9B for a major stake in China's top hypermart operator, Sun Art Retail Group (OTCPK:SURRY). "Physical stores serve an indispensable role during the consumer journey, and should be enhanced through data-driven technology and personalized services in the digital economy," Alibaba CEO Daniel Zhang said in the statement.

Alibaba goes offline with grocer stake - Alibaba Group Holding Limited (NYSE:BABA) | Seeking Alpha

Alibaba (NYSE:BABA) is raising its stake in logistics affiliate Cainiao to 51% from 47% by investing 5.3B yuan ($801M). It also expects to invest 100B yuan, or $15.2B, over the next five years to boost its global logistics network. Future goal? Alibaba wants to fulfill orders on the mainland withing 24 hours and within 72 hours globally.

Alibaba looks to grow logistics - Alibaba Group Holding Limited (NYSE:BABA) | Seeking Alpha

Amazon (NASDAQ:AMZN) is running Kindle ads across Alibaba’s (NYSE:BABA) China-based shopping sites in a move that suggests Amazon has given up on trying to compete in that market. Alibaba and JD.com (NASDAQ:JD) dominate the Chinese e-commerce space with Amazon scraping out less than a 1% market share after a decade of trying, according to Recode.  In Q2, Alibaba held a 51.3% sales share in the China e-commerce retail market with JD.com snagging 32.9%, up from 17.7% in 2014 according to an eMarketer report.  Amazon instead plans to focus on dominating the India market after promising a minimum $5B investment in the region.  Previously: JD.com gaining on Alibaba's Chinese e-commerce market share (Sept. 6)

Amazon appears ready to concede China market to Alibaba - Amazon.com, Inc. (NASDAQ:AMZN) | Seeking Alpha

JD.com (NASDAQ:JD) is gaining on Alibaba’s (NYSE:BABA) e-commerce market share, according to an eMarketer report using data from Analysys International Enfodesk. In Q2, Alibaba’s business-to-consumer Tmall e-commerce platform held a 51.3% sales share in the Chinese e-commerce retail market. JD.com was up to a 32.9% share, up from a 17.7% share in 2014. The gains largely came from the region’s consumers moving away from consumer-to-consumer sales.  JD.com’s Q2 revenue was up 44% on the year to $14B but the company reported a net loss due to marketing expenses.

JD.com gaining on Alibaba's Chinese e-commerce market share - Alibaba Group Holding Limited (NYSE:BABA) | Seeking Alpha

CNBC reports that Alibaba (NYSE:BABA) plans to open its first brick-and-mortar shopping mall near the company’s Chinese headquarters in Hangzhou. The five-floor “More Mall” will be constructed on a 40K square meter piece of land and will feature a mix of conventional retail brands and unique brands from Alibaba’s e-commerce Taobao platform.  The More Mall is scheduled for an April opening.    Previously: Alibaba opening 10K brick-and-mortar locations in China (Sept. 1)

Alibaba building its first brick-and-mortar mall - Alibaba Group Holding Limited (NYSE:BABA) | Seeking Alpha

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Alibaba runs or participates in a large number of smaller businesses that we have to take into account for our SOTP valuation. Let’s analyze them one by one. The first and most controversial one is Ant Financial, a company that once was under Alibaba’s direct control, but due to Chinese regulation, Alibaba had to divest its stake in the company. There is now only a profit-sharing agreement under which Alibaba receives royalty streams and a service fee paid at least annually, amounting to the sum of an expense reimbursement plus 37.5% of the consolidated pre-tax income of Ant Financial Services, subject to certain adjustments. But the important part is another:

In addition, in the event of a qualified IPO of Ant Financial Services or Alipay, if our total ownership of equity interests in Ant Financial Services, if any, has not reached 33%, we would be entitled, at our election, to receive a one-time payment equal to 37.5% of the equity value, immediately prior to a qualified IPO of Ant Financial Services, as a whole and not just of its subsidiary Alipay.

Assuming that Alibaba will choose the most convenient option, the entitlement to receive 37.5% of Ant Financial's equity value would translate into a value of $22.5 billion, based on its most recent funding round that valued the company at $60 billion.

• Alibaba owns a 20% stake in Suning Commerce Group worth $2.90 billion based on Suning’s market cap of roughly RMB 89 billion.
• Per the last 20-F, Alibaba owns a 38% fully diluted stake in Koubei, which I value at $3.04 based on a total value of $8 billion for the business.
• Per the last 20-F, BABA owns a 47% equity interest in Cainiao Network Technology, which I value at $3.619 million based on a $7.7 billionvaluation for the business.
• A 49.5% equity stake in Alibaba Pictures, worth $2.42B, based on Alibaba Pictures’ market cap of RMB 33.06 billion.
• A 35% stake in Sanjiang Shopping, worth $490 million, based on Sanjiang’s market cap.
• A 13% stake in Beijing Shiji Information Technology, worth $452 million, based on Shiji’s market cap.
• A 14% stake in Singapore Post, worth $313 million, based on Singapore Post’s market cap.
• An 11% equity interest in YTO Express Group, worth $835 million, based on YTO Express' market cap.
• A 4% stake in Huayi, worth $135 million, based on Huayi’s market cap.

By combining all these participations and rights, we have a total value of $36,704 million for the category “other investments” to use in our SOTP valuation.

Alibaba: My Valuation Of The Stock - Alibaba Group Holding Limited (NYSE:BABA) | Seeking Alpha

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Barron's mentions: JD.com (NASDAQ:JD) is seen as having more upside than Alibaba (NYSE:BABA), while some tips are offered up on how Google ([GOOG]], GOOGL) can play catch-up with Amazon (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) in cloud technology. The spotlight falls on earnings growth at Procter & Gamble after the company wons its board battle. Remember Black Monday 1987? Barron's does in a cover article that talks about the risk of a machine-driven meltdown.

Stocks to watch next week - Alcoa, Inc. (NYSE:AA) | Seeking Alpha

Alibaba Group has been expanding its offline footprint at a breathless pace in recent years, buying mall operator Intime Retail, acquiring stakes in supermarket chains Lianhua and Sanjiang, and launching its own Hema Supermarkets. The retail giant has now unveiled an even more ambitious plan to transform 10,000 mom-and-pop convenience stores across China into a vast network of Tmall.com brick-and-mortar outlets, where consumers can shop, pick up packages, make orders online or even apply for and receive small loans. It’s the first step in Alibaba’s broader plan to turn as many as six million convenience stores into smart service centers equipped with Alibaba’s e-commerce infrastructure and capabilities in financial technology, logistics and travel services. The ground-based campaign promises to disrupt traditional retail models in China, and likely worldwide, and dramatically expand Alibaba’s business by leveraging its already formidable online presence of 529 million monthly active users – all at a relatively low cost.

Alibaba To Transform China's Mom-And-Pop Shops In Massive Offline Expansion – China Money Network

As the tech giants become ever larger, there is growing concern within the Chinese government. It recently announced a policy which would allow it to gain 1 percent stake in these giants and also gain a board seat to better monitor the companies. I analyzed this policy in my last article and it looks that over the long run this policy should work in Alibaba’s favor..

Tencent being a social media platform will face much higher scrutiny than Alibaba which is a retail-first platform. Hence, this policy hurts Alibaba much less than its biggest rival which should be a net positive. Alibaba gets a mere 8 percent of its revenue from the media segment and if the government intervention in media segment is high then it can separate this division which will end up increasing its EBITDA because the media segment is losing money.

Alibaba: Closer Partnerships Among Rivals Pose Long-Term Risk - Alibaba Group Holding Limited (NYSE:BABA) | Seeking Alpha