Alibaba shares are down 3% in pre-market trading on Monday after this weekend’s brutal report in Barron’s.
This weekend, Jonathan Laing at Barron’s published a 3,000-word takedown of the Chinese e-commerce site that questioned the integrity of its financial statements, the company’s growth trajectory, and argued that Alibaba shares could fall 50% from current levels.
Alibaba, of course, disagreed, and on Sunday followed with a lengthy response, going through Laing’s argument on an almost point-by-point basis, adding that the story, “lacks three key ingredients — integrity, professionalism, and fair play.”
In a note to clients on Monday, SunTrust analyst Bob Peck — who has a “Buy” rating and $US100 price target on shares of Alibaba — said that while the Barron’s report “raised several fair issues…we think several other negative points were overstated/misconstrued.”
Of course, whether or not you think Barron’s is right or wrong, ahead of this report Alibaba shares have been absolutely brutal in 2015, falling more than 35% year-to-date through Friday.
This Friday will mark the 1-year anniversary of Alibaba’s public debut when shares priced at $US68 and rose 38% in their first day of trading. After topping out near $US120 per share in November 2014, shares are now near $US64.
Here’s the ugly year-to-date chart.
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