Alibaba 5x Short DLC Gains +50% as Alibaba Shares Plunge -10%

$BABA-W(09988)$ fell 10% on Monday (24 August) morning after announcing plans to raise approximately HK$80 billion through a share sale. The placement is expected to dilute earnings and weigh on the stock’s near-term performance.

Amplifying the move, the $Alibaba 5xShortSG270907(RHDW.SI)$ rose 50% in early trading, while the $Alibaba 5xLongSG270712(ZVNW.SI)$ fell a similar magnitude.

The weakness spilled into the broader technology sector, pushing the $HSTECH(HSTECH)$ down approximately 3.5%. Correspondingly, the $HSTECH 7xShortSG270309(9B2W.SI)$ rose 24.5%, while the HSTECH 7x Long (SYHW) fell by a similar magnitude.

With a packed earnings calendar ahead, Asia’s busiest reporting week could provide the next major test for the AI rally.

Investors who are bullish can consider the Long DLCs for leveraged exposure, while those who are bearish can look at the Short DLCs for inverse exposure to Hong Kong, Singapore, and US underlyings.

View the full list of DLCs on dlc.socgen.com

This advertisement has not been reviewed by the Monetary Authority of Singapore. This advertisement is distributed by Société Générale, Singapore Branch. This advertisement does not form part of any offer or invitation to buy or sell any daily leverage certificates (the “DLCs”), and nothing herein should be considered as financial advice or recommendation. The price may rise and fall in value rapidly and holders may lose all of their investment. Any past performance is not indicative of future performance. Investments in DLCs carry significant risks, please see dlc.socgen.com for further information and relevant risks. The DLCs are for specified investment products (SIP) qualified investors only.

Alibaba Hit Twice — Down 8.6%, Then HK$80 Billion Drained. Are These the Same Story?

Alibaba took two hits with different causes. Earnings first: adjusted net profit −38%, GAAP −75%, the U.S. listing down 8.57%, with JPMorgan still Overweight at a $210 target. Then dilution: an HK$80bn (~$10.2bn) placement outside the U.S. on August 23, its first since the 2019 HK listing, proceeds all to AI. Hong Kong shares fell 10.08% intraday, Tencent −3.72%, Xiaomi −4.41% as funds sold to make room. Against capex +75% and cloud revenue +45%, the dividing line is whether that HK$80bn becomes cloud revenue or depreciation. Buy the dip, or rotate to Tencent, which is not diluting?

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Alibaba 5x Short DLC Gains +50% as Alibaba Shares Plunge -10%

Comments