Alibaba Stock Dips as Huge Investment Losses In Q4 Overshadow Revenue Growth and Dividend
Portfolio Pulse from Anusuya Lahiri
Alibaba Group Holding Limited (NYSE:BABA) reported fiscal Q4 2023 results with a 7% revenue growth to $30.73 billion, surpassing estimates but saw a significant 86% drop in net income to $453 million due to investment losses. Adjusted earnings per ADS missed estimates by $0.01. The company announced a $4.0 billion dividend for FY 2024 and repurchased 65 million ADS worth $4.8 billion. Alibaba is preparing for a primary listing in Hong Kong by the end of August 2024. BABA stock dipped over 4% in premarket trading. Investors can also gain exposure through the Invesco Golden Dragon China ETF (NASDAQ:PGJ) and the ProShares Online Retail ETF (NYSE:ONLN).
May 14, 2024 | 12:35 pm
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NEGATIVE IMPACT
Alibaba's Q4 earnings report showed revenue growth but was overshadowed by significant investment losses, leading to a substantial drop in net income. The company announced a $4.0 billion dividend and a stock buyback program, alongside plans for a primary listing in Hong Kong.
The significant drop in net income due to investment losses and the slight miss in adjusted earnings per ADS are likely to negatively impact investor sentiment in the short term, despite the revenue growth and dividend announcement.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100
NEGATIVE IMPACT
The ProShares Online Retail ETF, which includes Alibaba, might be affected by Alibaba's Q4 performance, especially considering the stock's premarket decline.
As Alibaba is part of ONLN's holdings, the ETF could see short-term negative price adjustments in response to Alibaba's latest earnings report and subsequent stock performance.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 60
NEGATIVE IMPACT
The Invesco Golden Dragon China ETF, which includes Alibaba as a significant holding, may experience indirect impact due to Alibaba's Q4 earnings report, particularly due to the stock's premarket dip.
Given Alibaba's significant representation in PGJ's portfolio, the ETF may see short-term price movements reflective of Alibaba's stock performance post-earnings announcement.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 60