- NYSE:BABA recovered some ground, trimming part of its weekly losses.
- Chinese regulators end partnership with AliBaba’s Cloud Platform.
- AliBaba is looking to expand its Southeast Asian eCommerce market.
Update: NYSE:BABA trades at $118.66 per share, up 0.73% heading into the US close. The advance can be explained by a generalized optimism, triggered by upbeat US data. Also, reports indicating that the coronavirus Omicron variant is milder than the Delta one, provide support to the better mood. Investors are now heading into a long weekend, as most Europan and American markets will be closed on Friday due to the Christmas Holiday.
NYSE:BABA investors just cannot seem to catch a break this year, with another round of bad news heading their way. Shares of BABA tumbled by 4.20% on Wednesday and closed the trading day at $117.81. Just one day after it seemed like AliBaba was turning things around, the company received yet another black eye from the Chinese government. The move lower came during an otherwise bullish day for the markets once again, as all three major US indices closed in the green for the second straight session. The tech-heavy NASDAQ continued its resurgence by gaining 1.18% to pace the broader markets, while the S&P 500 and the Dow Jones both climbed higher as well.
The black eye that AliBaba received on Wednesday was in the form of a suspension of its partnership with the Ministry of Industry and Information Technology (MIIT). The partnership saw the government agency utilize AliBaba’s Cloud Services, but an alleged failure in reporting a security breach has caused the ministry to suspend this agreement. To make matters worse, it apparently was not even AliBaba that reported the breach, it was a third-party company that advised MIIT of the failure. AliBaba has been one of the main targets of the ongoing regulatory crackdown from the government, and this event just adds to the tension between the two sides.
In other news, AliBaba is continuing to try and grow its business despite the ongoing disputes with the Chinese government. The company recently announced it is going to try and expand its presence in Southeast Asia by committing $100 billion to its eCommerce infrastructure in the region. This could have trickle down effects with other companies like Sea Limited (NYSE:SEA), whose Shopee platform dominates the region and is partly owned by AliBaba competitor, Tencent.
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