Once the shining star of China's tech industry, Alibaba (NYSE: BABA) is falling back to earth. The e-commerce titan is down over 30% from peak levels, having been walloped by regulatory investigations in the U.S. and China.
Investing legend Charlie Munger sees this as an opportunity. In April, Munger revealed he had bought a $37 million stake in Alibaba via the Daily Journal Corporation ( NASDAQ: DJCO ), where Munger sits as chairman. Some investors were left scratching their heads over this decision. Others wonder if they should do the same thing.
There's no doubt that Alibaba is now cheaper than it was a year ago -- but that's purely from a valuation standpoint. Investors shouldn't rush to buy the dip before knowing two of the company's biggest risks.
For further details see:
2 Risks Investors Should Know Before Buying Alibaba's Stock