Why Alibaba Stock Dropped After Earnings
Shares of Alibaba Group Holding (NYSE: BABA), the Chinese e-commerce giant, tumbled 6% through 12:05 p.m. ET on Wednesday after reporting slight misses on both sales and earnings in its fiscal Q3 2023 financial report this morning.
Heading into earnings day, analysts had predicted Alibaba would earn $2.69 per American depositary share (each ADS represents eight common shares of stock on the Hong Kong market) on sales of $36.74 billion. As it turned out, though, earnings fell short at $2.67 per ADS, while sales came in just shy of expectations at $36.7 billion.
Are investors overreacting to a miss of just $0.02? A miss that -- let's face it -- amounts to less than 1% of the money Alibaba was "supposed" to earn? Perhaps. But it's worth observing that Alibaba's earnings were also objectively terrible.
Source Fool.com
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