Heisenberg
Stock Chartist, Long/Short Ideas
Alibaba can reach $130 near term, with heavy insider buying cushioning its recent drop. CEO Eddie Wu and chairman Joe Tsai bought about $15 million of shares, Tsai added another $10.4 million, and Jack Ma reportedly bought around $76 million in recent days, helping the stock back above $120. x.com
Heavy insider buying suggests something is brewing at Alibaba. After CEO Yongming Wu and chairman Joe Tsai bought about $15M of shares, Tsai bought another $10.4M the next day, and Jack Ma reportedly bought around $76M over a few days, with almost half his net worth tied to the stock. Alibaba remains a fun trading stock rather than a good long-term investment, with around $140 the level to exit. x.com x.com x.com x.com
Alibaba's offering looks leaked and already priced in, and Friday's options activity points much higher. Big money dumped the stock Friday because of the leak, so at worst it retests its China low before moving up, and the stock is already way too cheap. x.com x.com
Alibaba is inefficiently priced below the $270s, with monthly accumulation patterns and a support/resistance flip out of a multi-year base. On the yearly chart it is trying to defend its all-time AVWAP and enter a bullish trend for the first time since 2019. Its largest accumulation on record lies in the $230s, and the real, stable move comes if $230 is reclaimed. Like Palantir's drop to $7, this dead-money stretch offers great risk/reward for a long-term winner. x.com x.com
Alibaba is no longer worth owning when better opportunities exist. The case for it as a China hedge was a macro feeling applied to a single company, and it ignored Jack Ma being yanked away and a lack of cloud growth while leaning on share buybacks and looking too cheap to ignore. Despite its discount to US companies, other stocks, such as GitLab and Airbnb, now look much more compelling. x.com
Alibaba is sitting on its 200-week moving average just as China announces a stimulus plan, timing that supports the shares. x.com
Alibaba looks undervalued at a 52-week low, with a $229B market cap against expected 2027 operating income of $90B and double-digit growth anticipated for the next few years. x.com
Alibaba's HK$80 billion share placement, the largest in Hong Kong history, dilutes shareholders to fund AI just as the market rewards free cash flow and buybacks. Q2 free cash flow was -44.7 billion with capex of 67.7 billion, and the food-delivery war burned 80-100 billion, about what the placement raises. Selling shares after buying back at ~$97/ADS recasts a value stock as a growth bet. The deal was oversubscribed at a modest discount; the test is whether per-share free cash flow rises. x.com … Show more
Alibaba is a contrarian trade because accelerating demand for relatively cheaper compute is very underappreciated, and China's cloud market is still in its infancy versus the US. Alibaba is a consensus short as upside from closed-source AI looks illusory. x.com x.com
Alibaba and JD.com have grown far beyond what their flat share prices reflect. Alibaba trades near its 2016 price of about $108 while annual revenue rose from $15.7B to $148.4B, almost 10x. JD.com is back at its 2019 price of about $26.5 while revenue grew from $67.2B to $187.2B, nearly 3x. With both charts finally starting to improve, 100%+ upside is absolutely on the table. x.com
Alibaba's new paradigm is issuing shares, which makes the stock unattractive unless it falls by half from here. The latest example is an HK$80B ($10.2B) share placement to fund its full-stack AI capabilities. x.com
Alibaba has a decent bull case that the market is ignoring after pricing in dilution from its $10.2B stock sale. Most investors didn't look at why or how Alibaba raised the money. Insiders clearly saw it differently, adding over $100M in shares. A deeper top-down and bottom-up analysis with @AlphaPicks shows there is much more to the story than "dilution is bad". x.com
