Alibaba (BABA) Insider-Assisted SEC Probe Article May Be Short Seller Plant - Source
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Alibaba (NYSE: BABA) traded down over 2% in the pre-market Tuesday following a New York Post report that a 'high-up' staffer helped the SEC in its initial investigation of the company, which was first disclosed in May.
Shares have recovered somewhat as holes are being poked in the story. According to one source, the article appears to be a short seller plant, even though the article clearly stakes that its source 'wasn't affiliated with a short seller'. Notably, short seller Jim Chanos was also quoted in the article. Chanos is thought to be underwater on his Alibaba short. The article mentions 'one or more whistleblowers', which skeptics say is too vague to be accurate. It was also questioned why would an Alibaba executive want to put their own net worth at risk by blabbing to the Post.
In response to questions about the probe, Alibaba said "after we received the SEC inquiry, we voluntarily disclosed it, the details of which can be found on Page 188 of our annual report on Form 20-F.”
Shares of BABA last traded down 0.7%.
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