Alibaba was recently featured as a hot IPO in the ecommerce area, but is now suffering with a slowdown in the always growing country of China. The site is trying to expand sales by finding new customers that want to tap into the expanding Chinese middle class. Another effort is to make the exchange more available in the countryside of China. The stock, traded on the NYSE, has fallen from its high and is now only 14% above its IPO pricing.
The most recent earnings report, just released this week, showed a decent increase in sales of 26% but that was short of what investors had hoped for. The stock moved lower by 5% after the release. The company also announced a $4 billion stock buyback over four years which should provide support to the stock price. Compensation dilution is a concern as stock is given to employees of the company.
Alibaba did provide some caution during their IPO launch stating that results in the company were dependent on Chinese Internet usage, country growth, and increased online shopping. All three of these areas have come up soft compared to when the IPO happened.
Ari Zoldan provides insight on Alibaba's latest earnings