fbpx

Alibaba (NASDAQ: BABA) Fined $2.75 Billion – Now what?

Alibaba was fined 18.2 Billion Yuan on Saturday or roughly US$2.75 Billion; this amounts to 4% of 2020 Domestic Revenues or 12% of Net Profit. At first glance, this seems like a big amount, but yet, it is not crippling to the company. The fine is for anti-monopoly behaviour and abuse of its dominant market position.

Personally, we like it that this is settled meaningfully and transparently. The alternative is no fine, and clandestine blockades and boycotts. Of course, no one is to say that that will not happen nonetheless.

In an odd fashion, companies like Microsoft have also gone through the anti-monopoly wringer, and come out very much profitable for the shareholders. I am definitely not drawing parallels between the two companies in this case, but rather to put into perspective, that fines can be a normal part of business, as companies evolve.

Our thesis on Alibaba does not change, and in fact capitalises on this weakness.

Declaration: We hold positions in Alibaba.

Leave a Reply

Your email address will not be published. Required fields are marked *

Share This 🥟

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on pinterest
Pinterest

Recent Posts

Subscribe to Our Newsletter

Here’s where we dish out our finest snacks for your investing journey.

Scroll to Top