Why Alibaba Is At Fresh New Lows Again

Alibaba’s (NYSE:BABA) downtrend in the last year is nothing short of stunning for shareholders. The e-commerce giant could not shake off regulatory risks after Jack Ma criticized the government in public last year. Shareholders keep betting on BABA stock bottom, only to find the stock falling further. As the P/E falls to 15.5 times, cheap valuations are not enough to justify buying the stock.

Investors need to wait for signs that the Chinese government will not impose more fines against Alibaba. For example, Alibaba paid a record fine in the billions for abusing its position and acting as a monopoly. It contributed to China’s common prosperity initiative. None of those payments stopped the government from issuing tougher regulations on e-commerce firms.

On Sept. 28, Reuters reported that Alibaba started offering payment services from Tencent (OTC:TCEHY) WeChat. Users may not pay on Alibaba’s Shuqi, Damai, and Koala. This will compete with Alibaba’s payment service, Alipay.

To conform with China’s ban on all crypto miners and currency sales, Alibaba banned crypto on its platform.

The continued restrictions for technology firms will weigh on Alibaba’s profit margins. The stock will continue facing selling pressure until the government stops issuing more regulations.