BABA: A HUGE POTENTIAL TO BUY!

predator007
02-09

Lost in the discussion about the buyback is arguably the most important point in this earnings report. Namely, that $Alibaba(BABA)$ is finally going about the painful process of writing off nonproductive assets built up over years of investing in non-core businesses.

I have an InTime Mall literally a few blocks away (there are several in Hefei alone). Up until last week, I did not know BABA owned the chain.

If I had to guess, the writing off of these assets was supposed to occur in tandem with the restructuring, so that income from the latter would overshadow losses from the former. But the canceling of the IPOs means that the writing down of assets will stand out on the balance sheet, both in this quarter and ostensibly in future quarters.

In the CC, management seemed confident the buybacks can hold the line around the current price level (the T-bill comment indicates this confidence). I imagine they’ve taken into account future write-offs in their calculation.

BABA is not for every investor. But for those of us who averaged around $80 or lower, who have enough capital to range trade the bottom and are willing to write calls, it’s actually a profitable trading/investment vehicle. But one has to stay nimble and not get emotional one way or the other. [Miser]

Hopefully, BABA has a turnaround that yields outsized gains, but until then this strategy works.

# Do You Still Have Confidence in Alibaba?

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Report

Comment（1）

  • Top
  • Latest
  • HLPA
    ·02-09
    Fully agree with you here. Alibaba, BABA, is a monster stock not to have. The tag, Amazon, AMZN, of the east is not for nothing. I dare say, BABA is bigger than AMZN as it is a china play. With the support of billions of Chinese in Asia, AMZN is small feed. Yes, buy BABA now to reap big time when the going smoothens agaim
    Reply
    Report