Alibaba Stock Moves Close to $110

Alibaba stock is down more than 4% on Thursday, but the ecommerce behemoth has not dropped below $110.52 as of the late morning trade. $110 is a key support level. Below here, Alibaba stock will once again lose its bullish price action trajectory of recent weeks.

Alibaba Stock Moves Close to $110

Alibaba stock lost a lesser 1.6% in Hong Kong on Thursday. Now would be a great time for management to begin buying up Alibaba’s shares (hint! hint!). On March 22, Alibaba executives announced raising the company’s share buyback program from $15 billion to $25 billion for this year.

Alibaba shares rallied nearly 20% in the subsequent two sessions, but profit-taking was strong enough that Alibaba stock has found $120 to be resistance and is now moping around just above $110. Much of the uncertainty among traders was spurred on by The Wall Street Jounal’s article several days ago concerning Alibaba’s largest outside shareholder, SoftBank, considering reducing its nearly 25% stake.

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Obviously, any share dump at this point would put Alibaba stock back in bear mode. The Journal article said that some SoftBank executives worry that Alibaba’s low share price is stopping SoftBank from being more aggressive toward taking on debt and making new investments. SoftBank has an internal rule that debt cannot exceed 25% of assets, and Alibaba’s drooping share price over the past year and a half has stifled management’s options.

Alibaba’s 18% ownership of EV joint venture IM Motors has begun bearing fruit. IM Motors’ first mass-produced model – the L7 – went on sale on Tuesday. IM Motors is majority-owned by state carmaker SAIC. The L7 luxury model retails for nearly $65,000, making it much more expensive than a number of other EV models in the world’s largest car market, but that may be the point. Management has said unequivocally that they are directly in competition with Tesla (TSLA). Considering that, the L7 is priced above $20,000 cheaper than Tesla’s luxury Model S.

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Alibaba Stock Moves Close to $110 via @marketinvestor
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