Time for another prediction, which is that Ali Baba stock (BABA) is going to $130 within a year or so. In 2012 and 2013, I predicted correctly that Facebook stock would surge and Apple would flatline. Facebook indeed rallied 150% and Apple fell from $600 to as low as $300. I also predicted that the market would keep going up (also correct), that the fiscal cliff and sequester would be speedbumps instead of crisis (also correct), and that Snapchat would be worth over $10 billion (correct).
this 3% rally today is the start of a 30% one within the end of year
Like Facebook and Google, Ali Baba has many positives going for it such as:
1. Huge growth
The prospectus also says the company’s total sales revenue for the 2014 fiscal year that ended March 31 was 52.5 billion yuan ($8.56 billion), up 52% from the previous year. The company reported sales of 15.8 billion yuan for the second quarter of 2014, up 46%.
The company has seen strong profitability. Its net profit for the 2014 fiscal year rose 170% year on year to 23.4 billion yuan. For the second quarter of this year, net profit was 12.4 billion yuan, growth of 184%.
The left wishes Ali Babba were just another dotcom bubble like pets.com. The libs also used the botched Facebook IPO to bolster their confirmation bias, completely ignoring the strong fundamentals pf the company. Sure enough, as the stock has doubled from its IPO price, no one cares about the botched IPO but the libs on the blogs. Libs are so desperate for crisis and failure that they have to turn molehills into mountains or invent problems out of thin air.
2. No viable competition
These huge IPOs such as Google and Facebook have been great performers. Facebook is up 150% and Google up 1000%.
We’re in a risk-averse market. Small caps, emerging markets, retail, and mid cap stocks have lagging badly as huge funds and other investors seek safety in what has been an enormous 3-year rally. What is happening is funds fear the market’s positive streak will end and the smallest, most speculative stuff will fall the most, so they are parking their cash in the biggest and safest stocks like JNJ, MSFT, BAC, C, MO, WMT, GOOG, PG, FB, and AAPL that will fare better in a selloff. At a $220 billion dollar valuation, strong fundamentals and risk-averse, alpha-seeking funds, BABA will join the flight to quality trend and possibly surge as much as 30% by end of year and maybe even 100% by next year for a market cap almost as big as Apple.