Alibaba Stock Price and Forecast: Why is BABA dropping again? Bears are gaining even more ground
- Alibaba shares fall again in premarket, down 1%.
- BABA shares are again under scrutiny following reports of a manager being fired.
- Reuters reports the manager was fired for sexual assault.
Update August 23: Alibaba Group Holding Ltd (NYSE: BABA) has been extending its decline, falling below the psychologically significant $160 level and over 20% from the flirt with the $200 line seen during August. Shares of the giant online emporium have tumbled down mostly in response to China's "techlash" in which it reins in powerful technology companies and their founders. Monday's premarket data suggests that the misery is not over, with another decline from $157.96 to $156.50 expected. More: BABA Stock News: AliBaba is now technically bearish on the weekly charts
Alibaba shareholders are once again seeing their shares decline in value as the company faces up to another unwanted news story. Reuters reports that on Saturday a female employee posted on the Alibaba intranet an account of a sexual assault by a manager and a client and accused her superiors of not taking the matter seriously. Alibaba on Monday said it has fired a manager and promised policies to prevent sexual harassment, but the Reuters report says local Chinese media has been highly critical of Alibaba (BABA) for its handling of the event. Alibaba CEO Daniel Zhang is reported to have announced training for the entire company on the prevention of sexual harassment: "This incident is a humiliation for all Alibaba employees. We must rebuild, and we must change."
Alibaba (BABA) has been under the spotlight since its ANT Group subsidiary was forced to pull its planned New York initial public offering (IPO) at the last minute in late 2020. Shares of parent company Alibaba have never recovered. The stock was recently caught up in the DIDI regulatory crackdown that has spread to other Chinese stocks, and BABA stock continues to struggle for momentum.
Alibaba (BABA) key statistics
| Market Cap | $535 billion |
| Price/Earnings | 24 |
| Price/Sales | 5 |
| Price/Book | 3.5 |
| Enterprise Value | $584 billion |
| Gross Margin | 40% |
| Net Margin |
20% |
| Average Wall Street Rating and Price Target | Buy $278 |
Alibaba (BABA) stock forecast
BABA stock did manage to retrace back to the 9-day moving average but has not broken back above it. The stock, therefore, maintains its bearish trend. To turn bullish, BABA needs to first break the 9-day moving average at $198.83, but the key resistance to break is really $230 as this would end the series of lower highs in place since October 2020. We did mention the support at $180 previously from the volume profile and this is still the key short-term level, with the March 2020 pandemic lows at $170 the support below.
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Author
Ivan Brian
FXStreet
Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.
