Alibaba
Group shares were falling on Friday as the market digested its earnings. Excitement over its plans to spin off a series of its units have been undercut by concerns over its cloud-computing business.
Alibaba’s
(ticker: BABA) American depositary receipts (ADRs) were down 2.1% in Friday’s premarket to $83.96. That leaves them trading at roughly the same level they were before Alibaba detailed its plans to split itself into six units in late March, which sent the ADRs above $100.
It was a similar story in Hong Kong trading, where Alibaba shares fell 6% and are now down 4.4% for the year so far.
The Chinese technology company’s first-quarter earnings on Thursday were initially well received. However, analysts subsequently focused on a disappointing performance in the prized cloud division, where revenue fell 2% from the same period a year earlier.
“Both Alibaba and rival
Tencent
have announced price cuts for their cloud-computing services amid weak corporate demand and excess capacity, which has plunged the industry into a price war,” wrote Sergio Avila, a market analyst at IG, in a research note.
Write to Adam Clark at [email protected]
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