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  • Writer's pictureRealFacts Editorial Team

Alibaba Stock Plummets on Earnings Miss

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Despite a slight revenue beat, Alibaba stock faced significant selling pressure on Tuesday morning, plummeting over 7% within the first hour of the session. The company reported adjusted earnings of $1.40 per share, marking a 10% decline year-over-year, while revenue inched up by 1% to $30.7 billion. Additionally, Alibaba announced a two-part dividend totaling $4 billion, comprising an annual cash dividend of $1 per share and a one-time extraordinary cash dividend of 66 cents per share. Market sentiment was further dampened by the company's decision to abandon the listing of its logistics arm in Hong Kong. Ken Shreve, Investors Business Daily author noted, “Alibaba hoped the listing of its Cainiao Smart Logistics Network would raise $1 billion at a minimum. But Alibaba pulled the listing, citing overall weakness in the Hong Kong stock market.”

Amid ongoing regulatory scrutiny and internal restructuring efforts, Alibaba has faced a series of setbacks, including delays in spin-offs and executive changes. Despite rallies fueled by positive earnings reports and reports of insider buying, Alibaba continues to grapple with regulatory uncertainties and geopolitical tensions between China and the US. The company's strategic shift to separate into six distinct business units aims to navigate these challenges, but investor confidence remains cautious amidst a backdrop of regulatory pressures and a slowing Chinese economy. These challenges collectively contributed to the early Tuesday decline of 7% in the stock price.

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