Gloves off for Alibaba as e-commerce firm hits back at damning report predicting further share price drop
Jack Ma Yun, founder and executive chairman of Alibaba Group, said last week that he was used to "unlucky things happening everyday", but this didn't prepare him for the broadside that American news outlet Barron's hit the firm with this month.
New York-listed Alibaba has maintained an outward appearance of calm amid a recent sharp decline in its share price and a string of unflattering news that followed.
"We take strong issue with the reporting about the state of our company, and we feel compelled to set the record straight," wrote Jim Wilkinson, a senior vice-president and head of international corporate affairs at Alibaba.
Some of the points raised by Alibaba against the article, headlined "Alibaba: Why It Could Fall 50% Further", included what it claimed was a flawed comparison of Alibaba's price earnings multiple – a measure of how expensive a stock is – with eBay's, which does not operate in mainland China.
Wilkinson said "a more relevant comparison would be with our large-cap Chinese internet peers", which are Tencent Holdings and Baidu.
The story suggested that competitors were eating into the market share of Alibaba's e-commerce businesses in mainland China.
Wilkinson pointed out that the research study cited in the article was based "on a survey of a limited number of respondents and for which none of the geographic base, methodology or the party commissioning the research has been publicly disclosed to our knowledge".
The Barron's story was critical of Alibaba's investments beyond online retail -- including in media, entertainment, logistics and cloud computing -- which "seem aimed more at beguiling investors than improving earnings.
"Widely hyped Chinese IPOs like Alibaba often flame out like supernovas as growth rates and profit margins suddenly decline," it said.
It also suggested that Alibaba had failed to crack down on pirated goods sold on its online shopping platforms.
