Alibaba (BABA) is down 38% in 9 months. Something that was predicted on this blog on numerous occasions. For instance…..

Is Alibaba (BABA) Getting Desperate?

Alibaba (BABA): More Money Than Brains?

Alibaba (BABA) Time To Buy Or Go Short?

Another Idiotic Advice From Jim Cramer

You get the idea. Alibaba is a giant piece of overpriced crap. That is not to say that we won’t or can’t get a bounce here. That is to say that Alibaba is just starting its long-term descend.  Here is why.

• Alibaba is excessively overpriced. Click on the links above or search BABA on my blog. I have explained it previously.
• China is accelerating its collapse. As we saw with Yuan devaluation and their stock market collapse over the last few days/weeks. Don’t forget, most of Alibaba’s business comes from China.
• When bear markets hit, something we anticipate soon, overpriced and overhyped stocks like Alibaba tend to lose 50-90% of their value.

That is to say, if you have the guts to hold though the volatility, Alibaba is a great short. Even at today’s levels.

Alibaba & China: Heading In The Same Direction.  Google

Since it’s IPO, I have argued that Alibaba (BABA) is one giant overpriced and over hyped stock. By comparison and considering it’s valuation, Amazon (AMZN) is being given away. For instance, Alibaba Stupidity and Alibaba (BABA): More Money Than Brains?

Here is what peaked my interest.

Jack Ma, sparking America’s next gold rush?

“We want to connect small business in the West with the largest, fastest-growing market in the East,” he wrote. The strategy, according to Ma, is “simple and clear.” “Chinese consumers will get to buy the American products they want,” and this, in turn, he said, “will help create American jobs and increase U.S. exports.”

While that sounds good on paper, I believe it is to be an impossible task. At least at this time. About 3 years ago I was part of a group that was trying to identify what European or American consumer products we could sell in China (not commodity or industry related). We couldn’t find any. Whatever products we did identify, domestic Chinese suppliers were offering the same at 30-70% our costs.

So, a gold rush? I have my doubts. Perhaps another conclusion. It appears that Alibaba is getting desperate for growth. Considering its overall and massive overvaluation, it is not a good sign.

Is Alibaba (BABA) Getting Desperate?  Google