BABA posts solid results, ANT Group reaches deal with Chinese regulators.

BABA reports Q3 EPS of $3.38 ahead of expectations.
Alibaba revenue increased by 46% year on year.
ANT Group reaches deal with Chinese regulators.

 

Alibaba (BABA) shares are trading sharply higher on Wednesday in pre-market trading as Reuters reports that “ANT Group reaches deal with China regulators on restructuring”.

 

Investor conerns abated

Worries over ANT Group had been one of the biggest factors holding back BABA stock as the ANT Group IPO was cancelled at the last minute in December 2020. Jack Ma had criticised Chinese regulators and by implication the government in a speech he gave in October. BABA shares collapsed falling more than 30% in the immediate aftermath. Jack Ma disappeared from public view until giving a low key speech at a teachers meeting in January.

 

Solid results

BABA announced solid results on Tuesday beating analysts expectations on EPS and increasing revenue by over 46% year on year. BABA did not issue guidance for future earnings.

Reuters reported that Alibaba is to raise $5 billion in a dollar denominated bond offering this week. The funds are for general purposes. 

 

Upgrades after results

Raymond James issued a timely upgrade to BABA shares on Wednesday, maintaining the shares as a strong buy and increasing the price target to $350.

 

Alibaba shares are trading at $264.13 at the time of writing, up nearly 4%.

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Alibaba (BABA) Technical analysis

BABA shares have broken above resistance at $253.56 which now acts as the first support. BABA has also broken the recent downtrend series of lower highs. 

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