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Coronavirus causes Alibaba's share price to fall despite good 2020 results

Discussion in 'Business News & Resources' started by Helen, Feb 14, 2020.

  1. Helen

    Helen

    Joined:
    Mar 26, 2013
    Messages:
    520
    Alibaba CEO Daniel Zhang yesterday warned that the Coronavirus outbreak would impact sales, and a decline should be expected as workers and factories struggle to return to business as usual.

    The news for Alibaba in general was very positive with Q3 results (ending Dec 31st) beating their forecasts and a stock price rise beyond expectations. Without the Coronavirus outbreak this would likely have been a very different headline for their press conference. The finance chief Maggie Wu said that Alibaba "like other businesses are not immune to supply and demand" - it would have looked a bit crazy to hold a press conference without mentioning the Coronavirus and its likely negative effects over the coming months. Even in the UK we have seen JCB cut production as a knock on effect of component shortages coming from China.

    It will be interesting to see over the coming months, depending on the pattern and severity of the spread of the virus, how the retail, goods and deliveries industry is impacted and reacts.
    Import Expert likes this.
  2. Jed

    Jed

    Joined:
    Feb 16, 2009
    Messages:
    8,850
    I recently read a book called Alibaba - The house that Jack Ma built, highly recommend by the way.

    I can't remember exactly if it was the SARS virus or a different disease, but when a similar situation happened previously their sales went through the roof along with usage of their various online services as people were stuck indoors with nothing to do.

    One would imagine they will see the same phenomenon this time, depending on how long their supply and logistcs chains can keep going of course.
  3. Helen

    Helen

    Joined:
    Mar 26, 2013
    Messages:
    520
    Yes, I read an article about that the other day - saying that because people didn't want to go to shops they all started ordering online - think specifically their B2C marketplace had a big jump. They might be being clever for long term gain and saying they expect to be impacted negatively in the hope that they will actually see positive growth and their share price will jump higher
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