Alibaba Stock Falls As Company Is Reportedly Ready To Sell Its 30% Stake In Weibo
Shares of Alibaba moved closer to yearly lows after a Bloomberg report indicated that it was discussing a sale of its 30% stake in Weibo to a state-owned company.
According to the report, Alibaba wants to sell its stake in Weibo to reduce its influence in the media sphere. The company aims to become less powerful in this important market segment due to the pressure from Chinese authorities, who have been focused on limiting the power of Chinese tech companies this year.
The results of these efforts are highlighted by the performance of Alibaba stock, which has lost more than 50% of its value in 2021 and continues to move lower in the final days of the year. Other Chinese tech stocks have also suffered from sell-offs this year due to regulatory concerns.
What’s Next For Alibaba Stock?
The market remains focused on the activity of Chinese regulators and the company’s attempts to get out of regulatory spotlight. In case Alibaba is able to get back to “business as usual” without the constant pressure from regulators, its shares will get immediate support.
However, it remains to be seen whether Alibaba will have this opportunity in 2022. China has firmly decided to curb the power of tech companies, and the country does not look worried about financial consequences of its moves.
Alibaba stock has declined to levels not seen from 2017, but it is not clear whether speculative traders will rush to purchase the company’s shares. At this point, Alibaba’s valuation hardly matters as markets are focused on additional risks that may emerge in the next year.
However, it should be noted that Alibaba stock has already declined by more than 65% from all-time highs, so some traders could be willing to bet that the stock may have some upside at the beginning of the year when funds establish their positions for 2022.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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