BABA’s earnings, blah blah blah….
56% Year-Over-Year Growth… are you kidding me?! AMZN, the king of growth, sustains a growth of around 20-25% YOY, which in itself is fantastic, but that gives you an idea of how the Chinese giant is worth buying on the dip.
Why the drop? One perspective is that investors are not comfortable with the deal with Ant Financial.
“Not only did BABA trounce expectations, but it likewise is boosting is yearly guide following standout fiscal third quarter sales. So why the share pullback today?
Investors are getting skittish because on top of the strength of the print, Wall Street is paying notice to BABA’s second announcement: the company is purchasing roughly a third of its finance affiliate Ant Financial. This should pave the road for an initial public offering (IPO) of the Chinese payments company. The new shares are coming at a unique cost: specific intellectual property rights. To put it simply, no cash for this deal; just an equity stake. In return, Ant Financial is putting a close to royalty payments that swam beyond $300 million in fiscal 2017. Without the traditional cash deal, investors might find the acquisition more than a little odd.”
Am I missing something? I thought intellectual property rights and investment through EQUITY is the way to go?! Anyway, I’m bullish on BABA, and will be buying Ant Financial when they go public, at least that’s the plan. Trade on! 😀
BABA is down approximately 10.5 pts / 5.14%. Sitting on support from an ugly week in the overall market. This is not encouraging to bears.