- Recently, the Chinese Communist Party (CCP) launched a crackdown on tech companies using the Variable Interest Entity (VIE) structure.
- This predictably spooked investors, and Chinese tech stocks have been selling off ever since.
- Alibaba is one of the companies using the VIE structure.
- The fact that Alibaba is a VIE creates risks that investors need to keep in mind, but I remain bullish on the stock.
- In this article, I argue that BABA's strong fundamentals and cheap valuation make it worth the significant political risk it currently faces.
For further details see:
Alibaba: Keep Your Eye On The VIE