2024-04-05 05:23:09 ET
Summary
- Alibaba may not be the bargain that many investors expect it to be. The real return to investors is only $10 billion.
- Investors underestimate the effect of Stock-Based-Compensation, which diminishes the effect of buybacks. In addition, investments in marketable securities do not generate value for shareholders.
- Investors may prefer investing in Treasury bills rather than BABA shares. The company offers a return of 5.5% at best, compared to the 4.2% yield of the US 10-year Treasury.
Alibaba ( BABA ) is undeniably one of the most intriguing companies I've ever analyzed. It holds a dominant position in the e-commerce sector in China, and more in general in Asia, with a presence in Europe and America. However, over the last few years, its growth has tapered off, primarily due to intensified competition, and regulatory challenges in China....
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Alibaba: It Is Not The Bargain That Investors Expect It To Be