Monday, 14 September 2015

Alibaba Shares Could Fall Another 50%

Shares in Alibaba Group Holding Ltd, which recently slipped below their initial offering price after having rocketed 75 per cent in their first two months of trading, could lose another 50 per cent of their value, Barron's said in the cover story of its September 14 issue.

The reasons the weekly financial newspaper gave for the dour outlook: China's struggling economy, increasing competition in e-commerce and more scrutiny of the company's culture and governance.

Alibaba spokesman Bob Christie said the article "contains factual inaccuracies and selective use of information, and the conclusions the reporter draws are misleading". The company has posted on the internet a letter to Barron's editor complaining about the story.

The company runs two big retail websites and recently warned of lower-than-expected transaction volumes, after having reported that volume growth in the June quarter declined to 34 per cent from the 50 per cent-plus rates of the past.

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