Alibaba plummets as Chinese regulators bear down
Alibaba was China's most valuable company throughout most of 2020, and planned to finish the year with a bang by rolling out its much anticipated Ant Financial IPO. Then Chinese regulators stepped in.
In a crushing blow to both companies, China's top commerce regulator announced an investigation into Alibaba's business practices, alleging the company may be abusing its dominant market position for monopolistic purposes. A few days later, the Chinese central bank (the PBOC) issued a statement criticizing Ant Financial's business practices, ordering the company to focus on its less-lucrative digital-payments business. Alibaba owns one-third of Ant, and both were founded by Jack Ma.
When brings me to the next part of this story - whether China's actions against Alibaba and Ant were tied to the government's disapproval of Jack Ma's recent statements criticizing China's oversight of businesses. Retaliation seems a likely motive for the punitive measures against Alibaba, and Nomura research analysts note that China may also be using Alibaba's case to send a warning shot to other dominant technology companies acting anticompetitively.
Alibaba's shares have plummeted on the news, erasing nearly all of its stock market gains for 2020. It's U.S. counterparts are most closely Amazon and PayPal, and Tickeron's Artificial Intelligence analyzes all three below.
BABA's Stochastic Oscillator remains in oversold zone for 3 days
The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an uptrend is expected.
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Notable companies
The most notable companies in this group are Amazon.com (NASDAQ:AMZN), PDD Holdings (NASDAQ:PDD), Alibaba Group Holding Limited (NYSE:BABA), JD.com (NASDAQ:JD), eBay (NASDAQ:EBAY), Chewy (NYSE:CHWY), Vipshop Holdings Limited (NYSE:VIPS), Wayfair (NYSE:W), Just Eat Takeaway.com N.V. (OTC:JTKWY), Revolve Group (NYSE:RVLV).
Industry description
The internet retail industry includes companies that sell products and services through the Internet. With more and more consumers using online retailers, the companies have seen a big increase in the use of their services. Some of the companies in the group are focused on selling business-to-business products and services. Others sell business-to-consumer products and services. Internet retailers offer a wide variety of products like books, apparel, and electronics. Some companies even specialize in only one or two categories. One potentially critical factor for players to thrive in this space is the quality and speed of product delivery. This requires an investment in efficient distribution networks. Things like logistics are important factors in the success in the extremely competitive industry. For a company to stay relevant in the industry it must have effective pricing strategies and upgraded websites. The websites must be easy to navigate and engaging for customers. In addition to the revenues generated from straight sales, internet retailers can generate revenue from subscription fees and advertising. Amazon.com, Inc., Alibaba Group, and JD.com are some of the global leaders.
Market Cap
The average market capitalization across the Internet Retail Industry is 33.65B. The market cap for tickers in the group ranges from 622 to 1.87T. AMZN holds the highest valuation in this group at 1.87T. The lowest valued company is RBZHF at 622.
High and low price notable news
The average weekly price growth across all stocks in the Internet Retail Industry was -2%. For the same Industry, the average monthly price growth was 1%, and the average quarterly price growth was 8%. RERE experienced the highest price growth at 6%, while LGCB experienced the biggest fall at -47%.
Volume
The average weekly volume growth across all stocks in the Internet Retail Industry was -15%. For the same stocks of the Industry, the average monthly volume growth was -31% and the average quarterly volume growth was -17%
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
Valuation Rating: 62
P/E Growth Rating: 67
Price Growth Rating: 59
SMR Rating: 80
Profit Risk Rating: 90
Seasonality Score: 11 (-100 ... +100)