Donald Trump Will Pour “Cold Water” on Alibaba’s American Dream
Alibaba Group Holding Inc. (NYSE”BABA), China’s biggest online retailer is now facing an unexpected challenge with the election of Republican Donald Trump as US President.
“Trump is figuring out which campaign promises to carry out,” the magazine reports. “His charge that China is ‘killing us’ on trade, threats of 45 percent tariffs and desire to brand Beijing a currency manipulator could slam economic growth in the short run.” Barron’s said Sunday.
Alibaba, founded by former schoolteacher turned billionaire Jack Ma, is hoping to generate 50% of sales outside of China. A clampdown on trade would damp foreign revenue while hurting China’s growing middle class, a Key consumer group for the e-Commerce company.
While revenue jumped 55% from a year earlier to $5-B in the most recent Quarter, Alibaba is reaching plateaus in new customers and the average order price on its e-Commerce platform.
“If you don’t have Chinese consumers being engaged and buying American products, and Chinese investors cannot invest in the US and create more American jobs, then you’d be in trouble,” Alibaba Vice-Chairman Joseph Tsai told Barron’s.
Alibaba’s stock has risen 15% in the past 12 months to 93.76/share, but is down from its September peak of $109.87.
Donald Trump’s America 1st policies may worry investors in technology companies that do business in China, but the Organization for Economic Development (ECD) anticipates better growth under the new US President.
The Paris-based organization today raised its world GDP growth forecast to 3.3% foe Y 2017, +0.1%.
|NYSE:BABA||93.76||28 November 2016||0.75||93.02||95.74||93||14,286,100|
|HeffX-LTN Analysis for BABA:||Overall||Short||Intermediate||Long|
|Bearish (-0.35)||Very Bearish (-0.55)||Bearish (-0.29)||Neutral (-0.19)|