Alibaba Stock Drops Amid Hong Kong IPO Buzz

Alibaba shares are expected to begin trading in Hong Kong next week

by Lillian Currens

Published on Nov 13, 2019 at 10:37 AM

The shares of Alibaba Group Holding Ltd (NYSE:BABA) are lower, after the company launched its secondary listing in Hong Kong. The China-based e-commerce giant said it expects to raise as much as $15 billion in the initial public offering (IPO), which would mark the world's biggest cross-border secondary listing ever, with the shares expected to start trading in Hong Kong on Tuesday, Nov. 26. This IPO will likely be a boost for Hong Kong, which has been plagued by economic woes as months-long political protests continue. At last check, BABA is down 1.5% at $184.14. 

After last week's earnings report, BABA shot straight up the charts, touching a six-month high of $188.28 last Friday, and notching a 6% weekly win -- its biggest since August. During the past few sessions, however, the shares have been consolidating beneath the $187 region, which served as pressure for the stock back in April. Despite this recent ceiling, BABA sports a roughly 35% year-to-date gain. 

Alibaba has been no stranger to bull notes of late, with at least six analysts lifting their price targets just last week. The equity's consensus 12-month price target of $225.86 is still at a healthy 22% premium to current levels, and represents new highs for the security. Plus, all but one of the 17 covering brokerage firms call BABA a "buy" or better." 

BABA has been a favorite for options bulls, too, with 192,668 calls bought to open during the last 10 days, compared to 60,645 puts. And in the wake of last week's earnings report, short-term options premium is relatively cheap. In fact, the stock's Schaeffer's Volatility Index (SVI) of 27% is in the 11th percentile of its annual range, suggesting options players are pricing in relatively low volatility expectations for BABA right now. 

a schaeffer's exclusive

PLAY TRENDS LIKE A PRO!

5 tips to leverage profits in this FREE insider report!


 
 

Partnercenter


NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories


The Trend Minting Millionaires -- But Who Is Really Paying?
Porter Stansberry is making a concerning prediction.
Roller Coaster Week Defined by Trade Headlines, Jobs Report
The Dow made outsized moves in both directions this week
Needham is Buying Trade Desk Ahead of the 2020 Election
Trade Desk stock has more than doubled in 2019
The Trend Minting Millionaires -- But Who Is Really Paying?
Porter Stansberry is making a concerning prediction.