Alibaba’s Thesis Is Close To Breaking: 5 Things Investors Need To Know

Alibaba’s Thesis Is Close To Breaking: 5 Things Investors Need To Know

Posted On December 7, 2021 12:42 pm

Chinese tech stocks have gotten crushed, and BABA is down 54% from its highs due to steady deteriorating in its fundamentals and regulatory outlook.

China’s government is potentially preparing to ban all future foreign tech IPOs, cutting off $46 trillion in growth capital through 2030, $5.8 trillion per year.

China’s new policy towards tech innovation appears focused on top-down government-sponsored investment at the expense of tech entrepreneurs.

All Chinese Tech stocks are now extremely speculative, 1% or less max risk cap recommendations, and Fallen Angel “holds” regardless of valuation.

Alibaba’s fundamentals have deteriorated at a rapid pace. Its growth outlook has been cut in half, and its speculative hyper-growth thesis is now broken.

Those comfortable with its extreme risk profile might still benefit from 90% to 285% returns over the next five years.

However, for most growth investors, there are safer reasonable-priced hyper-growth opportunities, that are expected to deliver far better long-term returns, which I showcase in this article.

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Dividend Sensei

I'm an Army veteran and former energy dividend writer for The Motley Fool. I'm a proud co-founder of Wide Moat Research, Dividend Kings, and the Intelligent Dividend Investor. My work can be found on Seeking Alpha, Dividend Kings, iREIT, and the Intelligent Dividend Investor. My goal is to help all people learn how to harness the awesome power of dividend growth investing to achieve their financial dreams and enrich their lives. With 24 years of investing experience, I've learned what works and more importantly, what doesn't, when it comes to building long-term wealth and income streams and achieving long-term financial goals.

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