Day one for shareholders of Alibaba Group Holding Ltd (BABA) was great. Week one proved less so.
China’s largest e-commerce company slumped 3.7 percent to $90.46 last week after having soared 38 percent in its Sept. 19 debut on the New York Stock Exchange.
Alibaba, which was founded 15 years ago by Jack Ma, started trading after its record $25 billion initial public offering amid reports that indicated the world’s second-largest economy is slowing as the housing market slumps. While investors looking to tap into the world’s largest market of Internet users piled into the IPO, the economic slowdown is spurring concern the company, which gets almost 90 percent of its sales from China, may struggle to sustain growth.
Bearish investors who profit from price declines made their first bets on a retreat in Alibaba, boosting shares sold short to 12.1 million on Sept. 25. The weekly decline in Alibaba pared its advance since the IPO to 33 percent. According to one analyst, the weakness in Alibaba’s stock last week may also be caused by sales from investors who bought shares in the IPO and are now selling with a profit.