Alibaba may have processed a record $14.3 billion in sales in one day this Singles Day, but its shares fell for the second-straight day on Thursday.
Shares of Alibaba closed down 2% to $79.85 on Wednesday despite surpassing the 2014 Singles Day record of $9 billion in sales before lunchtime in China, and topping industry tracker IDC’s estimate of $13 billion to $13.8 billion in sales. On Thursday, shares tracked down another 1% to $79.01 on heavy volume, pushing them down 33% from 12 months ago.
While two instances is hardly a trend, this is the second time in Alibaba’s 14-month history as a public company that shares have rallied in the weeks leading up to Singles Day, then slumped right after.
The stock reached an all-time high of $119.15 the day before Singles Day 2014, following a 39% run-up of its shares from mid-October to Nov. 11. It fell 3.8% on Single’s Day, and then suffered a six-month-long decline through April 2015.
This year, the stock climbed 49% from a record-low of $57.39 on Sept. 28 to a peak of $85.40 on Nov. 4, then fell 2% on Singles Day.
The share-price decline could in part be attributed to profit-taking and a high level of short interest, which has more than doubled year-over-year, according to FactSet. The company is also grappling with increased competition in China from JD.com.
Alibaba’s revenue continues to trend higher, however, and analysts remain bullish on the stock and the growth of Single’s Day. In a note to clients on Thursday, Cantor Fitzgerald analyst Youssef Squali said the 54% year-over-year growth in Singles Day gross merchandise volume bodes well for December-quarter results. He reiterated a buy rating and $90 price target on the stock.
The average rating on the stock among a poll of 35 analysts on FactSet is the equivalent to buy, with an average 12-month price target of $94.09, which implies an 18% improvement from Wednesday’s closing price.
Forrester Research Beijing-based analyst Xiaofeng Wang said the growth of Singles Day since Alibaba created it in 2009 signals a maturing base of online and mobile shoppers in China. The fact that the record was broken so early on in the day also likely indicates that retailers are offering more aggressive deals, and earlier than years prior, and that more retailers, including non-Chinese companies, are participating in the day of deals, Wang said.
Interestingly, shares of U.S. e-commerce giant Amazon.com Inc., which launched its own day of day of deals called Prime Day this past July, closed up 2% to $673.25 on Wednesday. Amazon shares have gained 28% in the last three months, outperforming the S&P 500.
Amazon has not offered specific sales data for Prime Day, but has lauded the day for an uptick in Prime memberships, one of the company’s primary revenue drivers.
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