Alibaba Group Holding Ltd. (BABA) shares experienced a significant decline on Tuesday, following a trend seen in other U.S.-listed Chinese stocks. This downturn can be attributed to China’s National Development and Reform Commission (NDRC) announcing disappointing stimulus measures that fell short of investor expectations.
Investors had anticipated bold measures from the commission’s chairman, Zheng Shanjie, during a Tuesday press conference aimed at stimulating the country’s economy. However, Zheng’s announcements amounted to a 100 billion yuan investment plan for 2025, scheduled to be released by the end of this month, and a separate 100 billion yuan allocation for construction projects.
The underwhelming stimulus measures triggered a downturn in China’s stock markets on Tuesday, erasing earlier gains. Hong Kong’s Hang Seng index closed with a substantial 9.4% decrease, while the Shanghai Composite Index, despite significant fluctuations throughout the day, ultimately closed with a 4.6% gain.
Alibaba and other U.S.-listed Chinese stocks, heavily owned by foreign investors, are particularly susceptible to market shifts. This volatility is evident in the performance of other U.S.-listed Chinese stocks affected by the situation, including JD.Com Inc. (JD) and NIO Inc. (NIO).
How to Buy Alibaba Shares
If you’re interested in investing in Alibaba, you can typically purchase shares through a brokerage account. Many online platforms offer this service, and some even allow for fractional share purchases, enabling you to own a portion of a stock without buying an entire share. This is particularly useful for stocks with high share prices, like Berkshire Hathaway, where a single share can cost thousands of dollars.
For those seeking to bet against a company’s performance, the process is more complex. You’ll need access to an options trading platform or a broker who allows short selling, where you borrow shares to sell. Shorting involves profiting from a decline in share price. Alternatively, you can use options trading to benefit from a price drop by purchasing put options or selling call options with a strike price above the current share price.
BABA Price Action
At the time of writing, Alibaba shares are down 7.07% at $109.21, according to data from Benzinga Pro. This downturn reflects the broader market sentiment concerning China’s economic outlook following the underwhelming stimulus announcements.
