Alibaba (BABA) Stock Falls as Citi Says SoftBank May Have Plans to Sell After SEC Filing

February 7, 2022 8:22 AM EST
Get Alerts BABA Hot Sheet
Price: $84.27 --0%

Rating Summary:
    35 Buy, 5 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 8 | Down: 10 | New: 8
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Shares of Alibaba (NYSE: BABA) are down over 3.5% in pre-market Monday after the company registered one billion American depositary shares (ADS) that hadn’t been registered before.

For Citi analyst Alicia Yap, this is a signal that Japanese investing conglomerate SoftBank may sell its massive stake in BABA. SoftBank owns 5.39 billion ordinary shares of Alibaba, equivalent to 673.76 million ADSs, or a 24.8% stake, Yap calculated.

“While we believe a portion of the new registration could suggest future new shares to be issued pursuant to the employee equity incentive plan, we believe it might also suggest potential selling intention by Softbank,” Yap said in a client note.

The analyst also reflected on the CNY report, released by BABA on February 06, focused on the Winter Olympics.

“From Jan 31 to Feb 4, skiing related equipment sales on Tmall had increased by over 180% yoy, while snow/ice sports related categories sales surged by >300% yoy, and winter snow related travel package orders grew 30% on Fliggy. On the night of Feb 4 of the Winter Olympics opening ceremony, over 1mn users entered the Olympics Tmall Flagship Store to purchase Olympics related souveniors, and the sales of down jackets also saw a big increase vs the prior week. Tiger related merchandises have been popular, with search inquiries of related products growing 874% yoy,” the analyst added.

Yap has a Buy rating and a $216.00 per share price target.

By Senad Karaahmetovic | [email protected]

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Citi, Senad Karaahmetovic