BABA Stock Price: Alibaba soars as investors shrug off Softbank rumors

NYSE:BABA gained 6.17% during Tuesday’s trading session.
The Chinese state-backed funds scoop up beaten down local stocks.
AliBaba investors shrug off rumors of Softbank selling its stake.

Stocks Reporter FXStreet

NYSE:BABA might be showing us that the worst of its stock sell off is behind the company, as shares rebounded during a strong session on Tuesday. Shares of BABA jumped by 6.17% and closed the trading day at $121.90. It was a strong showing for Chinese ADRs on Tuesday as many of AliBaba’s peers also saw a significant surge. Shares of PinDuoDuo (NASDAQ:PDD), JD.Com (NASDAQ:JD), Nio (NYSE:NIO), XPeng (NYSE:XPEV), and Didi Global (NYSE:DIDI) were all in the green on Tuesday. As well, all three major US indices traded higher, led by a rebound for big-tech companies, sending the NASDAQ higher by 1.28% during the session.

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The news that was likely sending ADRs higher was that the Chinese state-backed investment funds reportedly bought up shares of local Chinese companies. Most of the stocks that were purchased are listed on the CSI 300 in China, which helped the Chinese markets towards a nice day of gains. While AliBaba does not directly trade on the CSI 300, the stock rose alongside all other Chinese ADRs. The government’s investment could be a signal that the floor is in for these beaten down Chinese companies, and thus investors on the US markets took the chance to gobble up the beleaguered ADRs.

BABA forecast

The rally on Tuesday might be a sign that the sell off on Monday was an overreaction. Investor’s seemed to shrug off the report that the company’s largest shareholder, Softbank, will be looking to trim its stake in AliBaba. Given that Softbank owns over 24% of AliBaba’s shares, it is likely that the Japanese tech company needs to free up some additional capital, rather than not believing in the fundamentals of AliBaba’s business.

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Stocks Reporter

FXStreet

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