People love Alibaba, as it is unarguably the best online marketplace for ordering dildos and colorful fidget spinners. Indeed, you can buy lots of other cool stuff on their website. However, what can be even more exciting is the opportunity to profit from Alibaba stock investment (ticker: BABA).
Alibaba was founded in 1999 by Jack Ma, the company’s current executive chairman. He is also one of the key shareholders of BABA along with the company’s executive vice-chairman Joseph C. Tsai. The biggest part of Alibaba stock belongs to the institutional holders such as SoftBank, Yahoo, and Silver Lake Affiliated Entities.
Alibaba shares trade at $169.92 as of writing. This company is one of the largest in the world in terms of the market capitalization, which is $392.70 billion. For the last year, Alibaba broke all the records with the stunning revenue figure of nearly $23 billion.
When Chinese e-commerce giant went public
It might sound as a big surprise, but Alibaba IPO was the largest one in the history. In 2014, the Initial Public Offering deal raised $25 billion for the company. The Chinese e-commerce empire chose NYSE as its host exchange. The stock was initially priced at $68, but just the price soared to $92.70 per share the following day. Since that the stock had been appreciating, dropping substantially only two times in July 2015 and February 2016.
Despite the fact that more and more people consider investing in Alibaba, there are still a lot of bears around. Funny enough, Alibaba is the most shorted stock in the market. Instead of profits, Alibaba bears so far got nothing, but a cock in the mouth. Estimated total loss on the short positions is around $10 billion. On the contrary, we are quite bullish about Alibaba growth and money-making prospects.
Why is the future on Alibaba side?
It is not a secret that Alibaba financials are very strong. It also has over $20 billion in the cash. However, there are other multiple factors that create quite a nice picture for Alibaba stock in the long-term perspective, say 7-10 years from now.
By the year 2020, investors expect that the Chinese online retail market will reach the milestone of $1.1 trillion. Taking this into account, Alibaba strongly believes that in the 10-year perspective around 50% of China’s consumption will take place online. This will boost the e-commerce market in which Alibaba is perhaps best placed to rip off immense profits.
Moreover, the company is seeking for the international expansion as well. As an example. BABA has bought 81% stake in the largest e-commerce company in Southeast Asia – Lazada. Maybe it’s a bit early to contest Amazon in the US market, but no doubts that Alibaba may try this soon.
Alibaba is also making savvy investments, ranging from well-known companies to start-ups. The main reason is to add more diversification to its current business and generate profits in the long-term. For instance, the company invested in the companies like Lyft, SoftBank Robotics, Snapchat, Meizu and others.
Overall, if you are a buy-hold investor, then the option to invest in Alibaba shares is something that you might be looking for.