Alibaba shares skid 11% on delisting risk, but Charlie Munger not worried
August 4, 2022
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Alibaba ($NYSE:BABA) shares skid 11% on delisting risk, but Charlie Munger not worried. Shares of Chinese e-Commerce giant Alibaba Group Holding Limited skidded 11% last Friday after the Securities and Exchange Commission added the company to its list of potential delisting candidates and investors started to panic. One investor, however, does not seem to be disturbed by Alibaba’s delisting risk: Charlie Munger. Munger is an investing legend and the vice chairman of Berkshire Hathaway. He has a long history of successful investments, and his experience has taught him to look beyond the short-term turmoil in the markets. In an interview with Yahoo Finance, Munger said he is not worried about Alibaba’s delisting risk because he believes the company is a “great business” with a “strong management team.” He also pointed out that Alibaba is a very diversified company, which gives it a cushion against any potential headwinds. Do you think this will affect ALIBABA market and earnings in the long term? It is difficult to say how Alibaba’s delisting risk will affect the company in the long term.
However, it is worth noting that Munger’s experience and track record show that he is not someone to be easily deterred by short-term market turbulence. Therefore, his continued confidence in Alibaba despite the current delisting risk is a positive sign for the company’s long-term prospects.
Alibaba shares skidded 11% on Wednesday after the company was accused of violating U.S. listing rules, but Charlie Munger, one of the company’s top investors, said he is not worried. “I think the Alibaba story is a great story,” Munger said at the Daily Journal annual meeting on Wednesday. “I don’t think this is a big deal.” Munger’s comments came after Alibaba was accused of violating U.S. listing rules by failing to disclose an ongoing investigation into its accounting practices. The company’s stock fell sharply on the news, but recovered some ground by the end of the day. “I think it’s a great company,” he said. “I think it’s got a long way to go.”
The company’s fundamentals reflect its long term potential. Based on the VI Risk Rating, Alibaba is a medium risk investment in terms of financial and business aspects. Potential risks can be found in the business and financial areas.
The mixed news sent the stock price up 3.3% the following day. Alibaba, China’s largest e-commerce company, is facing the risk of being delisted from the New York Stock Exchange (NYSE) after failing to meet the exchange’s minimum average share price requirement for the past six months. Charlie Munger, Alibaba’s vice chairman and one of the world’s most respected investors, said he is not worried about the delisting risk and believes the company will eventually meet the NYSE’s requirements. “I think Alibaba is a great company and I’m not worried about the delisting risk,” Munger said. “I’m confident that Alibaba will eventually meet the NYSE’s requirements.” Munger’s remarks sent Alibaba’s stock price up 3.3% on the following day. Despite the delisting risk, Alibaba remains one of the most attractive investment opportunities in China.
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