ALIBABA IS ASS
How the mighty have fallen. Alibaba’s illustrious IPO in 2014 served as a focal point in the world of e-commerce, nearly joining the likes of Amazon, Microsoft, Google, Apple, Tesla, and Saudi Aramco in the $1 Trillion Market Cap Club. And now for the first time since going public 8 years ago, they failed to generate revenue growth.
And to quite literally nobody’s surprise, the Hangzhou company blamed the mother of all scapegoats, COVID-19. COVID was basically a dream come true for anyone who took zero responsibility for anything that happened. These companies basically only benefited from the liquidity fuck fest that central banks across the world engaged in. What about Main Street? Anyways, I digress.
Q2 revenue for the company fell 0.1% YoY to a total of $30.7 Billion. While their revenue and sales drop isn’t really anything earth shattering, it does mark the turn of the Chinese tech/e-commerce giant that took the world by storm.
Daniel Zhang, CEO and Chairman says, “We are confident in our growth opportunities in the long term given our high-quality consumer base and the resilience of our diversified business model catering to different demands of our customers.”
While Alibaba is arguably the most dominant marketplace in China, there is only so much that artificially arming consumers with liquidity can do for your bottom line, especially when your country is hell-bent on stopping ANYBODY who dares to look sick, with implementation of COVID-zero policies that have crushed their economy, and added unnecessary stress on already fragile supply chains (which will just never get fixed).
Amazon has similarly alluded to slowing earnings growth after the pandemic-darling stock reaped the benefits of lockdowns, alongside massive government contracts to AWS. Not to mention the most goated move in Wall Street history.
Alibaba has also fared well from an absolutely nuclear U.S. dollar, which more or less offsets inflationary pressures that have stricken just about everyone. Alibaba will likely be focusing on cost-cutting measures (aka layoffs en-masse). Rising unemployment in China will also add to headwinds for the company, as they will have to fight tooth and nail to secure higher revenue growth. Also, does anyone know where Jack Ma is? Did he ever resurface?