Is Alibaba Too Risky?
Alibaba’s (BABA) stock price along with many other China-based ADRs has fallen precipitously. The question has become: is the political risk too great to invest? An article published in the Wall Street Journal this past weekend motivated me to produce this update. I believe the fundamentals of Alibaba are excellent relative to the long-term. In contrast, short-term fundamentals have weakened primarily as a result of political risk. Therefore, I would suggest that this extremely high-quality e-commerce company has become clearly speculative. The real question is whether or not the ADRs will continue to be listed or not?
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Disclosure: Long BABA.
Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.