r/baba
But Baba is cheappppppp
Sarcastic meme post acknowledging BABA is cheap for a reason; author self-identifies as a bag holder.
- BABA is cheap for a reason — low valuation reflects fundamental problems rather than opportunity
To all the bag holders out there (myself included)
It’s cheap for a reason if you want to be technical
It’s weird that people have such strong feelings about this stock. I don’t remember anyone having a daily whinge about Microsoft when it went nowhere for a decade plus.
They were, I was there lol.
I was also there when people said amd was dead and not so long ago Intel. Amd was hiring new architect and cutting business sectors that were burning cash.
Now people are saying China is uninvestable despite growing 5% gdp per year, exports surging, and the entire economy modernizing at an insane rate. China is growing at 5% gdp per year while at the same time facing a real estate financial crisis like in 2008× in the us without massive stimulus spending.
It’s not just baba, the Chinese tech sector is cheap, including baba, Tencent and Xiaomi.
Tencent is deep value
I’ve added at $450
Will add again at $400
I will push to have more than 2000 shares of Tencent if it goes under 400 HKD. Tencent is a cash cow, the drop has no reason, just liquidity goes to chase AI hype.
The upside is better with Tencent and the downside is limited
If alibaba fails to scale ahead of capex, they will be in serious trouble years ahead.
Never say never
China have a habit of destroying margins at the expense of market share
As a former bag holder myself, yall need to let go of this piece of shit stock.
Yall been holding since the ANT IPO anticipation and down like 50%
Could have made a buttload of money elsewhere over the past 5-6 years.
There is still a path to ATH.
We go to church on weekends, praying
lol
Technically BABA is undervalue. I've bagholding for 3 years. Missing the opportunities of other tech stock that went down and back up breaking new high.
I cannot tell if we are in agreement or not (i think we are)
You're right that the price mattered - thats what made PDD's business model sustainable, contrary to BABA management's short sighted comments. They operate on a similar flywheel effect as Costco, bulk buy at discounts, attract more users, which then increases the said discounts due to larger bulk, further attracting more users. Yes PDD did also engage in subsidies, but once the flywheel started, it is self sustaining. BABA's ecommerce market share fell from 60% to 40% as a result.
Contrast this to instant retail, like you said, there is no moat, which management instead decided to burn cash on it, incredibly ironic after their comments PDD. Daniel Zhang simply lacked the foresight and business acumen to outmanuvere competitors, typical of CFO types who only look at numbers and out for the next 1-2 quarters.
Another short sighted move i could remember was the business spinoffs to "unlock value" - dude, your core business is under siege for crying out loud, why are you turning a blind eye and still thinking about playing with numbers? No amount of spinoffs will fix the underlying issue. It was hilariously called off so shortly after announcement (and rightfully so), a testament that management had no clue what they were doing
When Alibaba was trading sub $100, it was a consumer turnaround story
For now, that thesis is broken. Nothing turned and we can dream this time it’s different. What is covid?! Oh wait, it’s a nothing burger but people still ain’t spending.
So the thesis now turned to Ai, it was an optionality, but now it’s the principle
Again, who knows. Maybe they can hit the magical $100 billion revenue target in 5 years. But at what cost and what margin will be delivered. That’s anyone guess.
So here we are, a chain of copium,
Delisting fear, Covid, consumption turnaround
Nothing really mattered, but it didn’t change the trajectory of the business either
But hey, if they do turn this into a Ai juggernaut, it can double.
What I am genuinely concerned about is the hyper competition. You have deep seek doing 70% off permanent price cuts. I honestly dont know enough about tomorrow, let alone 5 years
Part of that thesis breaking was because PDD ate BABA's lunch. Management just stood like a sitting duck while PDD and Douyin massacred their market share, while whining about how unsustainable PDD's business model was (turns out, its pretty dam solid) and yet flipping over to engaging in price wars in food commerce (is this now supposed to be a sustainable business). Along with 100 other stupid capital allocation decisions by Daniel Zhang (what even was the point of Sun Art?)
I think finance nerds can't have it any other way. They are as bad as accountants when it comes to justifying and rationalizing investments. No, a company's stock price will not reflect fair value, if ever. It will always be over or under. The point is being aware what part of the bull or bear cycle we are at big picture and then acting based on that.
I’m so glad I’ve moved on - only regret is selling more around $180