In this video I will talk about the recent scandal that hit Alibaba (BABA 1.03%) and go over its recent earnings report. You can find the video below.
In Q1 Alibaba reported revenue of $31.86 billion, a 34% year-over-year increase. Operating income was $4.7 billion, a big increase after last quarter, which was negative for the first time in years as a result of the antitrust probe in China. Annual active consumers across the Alibaba ecosystem reached 1.18 billion, including 912 million consumers in China. Cloud revenue was up 29% to $2.48 billion, though there has been a decline from one of the top customers. Alibaba's board also authorized a larger share repurchase program, going from $10 billion to $15 billion.
Regardless of how great Alibaba is, it seems as if the market is very careful with this stock. I talked about Alibaba's ecosystem and business flywheel a month ago, and although the stock has tremendous value, a lot of risks are attached to it. Yesterday, Alibaba got hit with a sexual assault scandal regarding one of the managers that worked there. The manager has now been fired. But it seems as if Alibaba can't catch a break; if it isn't the Chinese government's tech crackdown it's something else. Maybe this is the perfect time to buy shares of Alibaba, or maybe it's the beginning of the end for Chinese stocks trading on US stock exchanges. Only time will tell.
For full insights do watch the video below.
*Stock prices used were the closing prices of Aug. 9, 2021. The video was published on Aug. 10, 2021.