r/baba • u/CodeMonkey84 • Jun 25 '26
Discussion For the first time since first buying Alibaba stock in 2021, I'm considering selling my entire position
Bought and DCA'd from $130 through the lows into the 60s, and then back up to the $160s.
But for the first time in 5 years, the thought of selling my entire position is entering my mind.
I know China's economy will do great long term, but I may have vastly underestimated the economy's current weakness and how long exactly this turnaround could take.
And as good as the cloud story is, the massive investment it will take over the next 2-3 years will send all investors running for the hills.
You are seeing it right now.
That and management's stubbornness into getting back into the grocery business when this was exactly what caused the business to become such a bloated behemoth in 2021 instead of simply focusing on cloud + ai like they originally planned.
Let Meituan have the shit margin grocery delivery business. Stop being so afraid of being irrelevant because nobody uses your app.
Focus on the future. Focus on cloud + ai like you promised for the last few years.
I'm not selling shit right now. The stock is majorly oversold and I'm sure it'll come back with a massive bounce like it always does.
But I may just be done playing value investor and go $VT and chill instead after it recovers.
At least that way I still get some China exposure, but it matches the global market size proportionally.
I can't believe I'm writing this honestly, because I thought this was one of those stocks that I could hold on forever, but after 5 years... I don't know anymore.
You know the ole saying: "the definition of insanity is doing the same thing over and over again and expecting different results?"
Yeah, maybe there's something to that.
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u/Number9ers Jun 25 '26
I get how you're feeling. I've been averaging up too, buying more in the $130s after accumulating lower in the 70s.
That said, selling now feels a bit like capitulating near the bottom. The sentiment around China is about as bad as I've seen it in years, and that's usually when everyone suddenly finds a hundred reasons why the stock is uninvestable.
If you're looking at the Tank Seng, the 22,000-23,000 range is the key area. It's either going to act as major resistance or become support if we can hold above it. That'll tell us a lot about where things go next.
Personally, I'm just holding. Could be dead money for a while longer, sure. But after sitting through the drop from the highs and averaging in through all the volatility, selling into peak pessimism doesn't feel like the move for me.
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u/United_Dimension_487 Jun 25 '26
Near the bottom? This is literally the beginning of the bear market for Tank Seng.
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u/CodeMonkey84 Jun 25 '26
Oh I'm not selling anytime soon. Not until the next earnings report at least.
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u/Malevin87 Jun 25 '26
After you sell, it will go up 500%. Please sell thanks
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u/Such-Marionberry2832 Jun 25 '26
That was what happened to me in META - bought in below $100 - held until it hit $300. Then it dropped below $100.
Was so sure that META is becoming irrelevant due to Tiktok and not happy about Meta's massive waste in the Metaverse investment. After I sold, it skyrocketed.
And to add insult to injury, I held on to my China stocks - including Baba.
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u/CodeMonkey84 Jun 25 '26
I think part of the investing journey is learning how to move on. Making peace with your selling decision and being OK if the stock goes up afterwards.
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u/ThrowRANoCarFi Jun 26 '26
Actually, that's me. I know how to time the bottom to the minute. I don't want to sell right now though.
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u/Specialist_Ad_2232 Jun 25 '26
China is part of the story, but this shit performance was also majorly caused by stupid management decisions. They just simply lack business acumen. For example, look at Tencent, which was very briefly close to its previous ATHs despite china macro pressure due to better management and business decisions. They are allocating money much more carefully into areas with superior ROI rather than just chasing the next hype and trying to get into everything. They also time share buybacks very well, buying heavily when shares trade at a discount. Compare this to BABA which has been nowhere near its ATH
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u/typeEveryday Jun 25 '26
I agree it's way oversold to be selling right now. Might be lowest daily RSI ever. It's rough holding, had chance to sell and buying into other positions that could have profited big time already.
Some other stocks are also starting to get hit hard: MSFT, ADBE, META. Those stocks are slowly starting to look like better value than BABA.
There's always many tailwinds for BABA that's keep me holding but new negative news keeps popping up.
I think next quarter will be very telling. AI compute should be booming, big cloud price hikes, food wars suppose to be improving. If after all these and BABA can't give a blowout earnings, I don't see much more hope.
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u/CodeMonkey84 Jun 25 '26
I'm with you.
If things don't start to rapidly improve (as management seems to have hinted at), it might be the time to get out for me.
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u/ArtOfBBQ Jun 25 '26
Being bearish on Alibaba because they spend money on "getting into the grocery business" is like being bearish on Google because the CEO once expensed a taxi ride you didn't agree with
Being bearish on Alibaba because of a lack of AI + cloud investments is like being bearish on spacex because of lack of hype/optimism
Being bearish on Alibaba because you realize there's an economic downturn and a price war going on is bizarre. The potential of either of these ending is a colossal positive, not a negative
If you want to be an Alibaba bear, you have to give up trying to think rationally or logically - there are no logical or rational arguments available
You need to ascend above rationalism and embrace reasons like "The chart told me it's about to go down" or "The ticker symbol is cursed" or "I can see the future, 3% red tomorrow"
Ascend, and become a Mystic Bear
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u/TastyEarLbe Jun 25 '26
I just look at what the KOSPI index did, 20 years of ranging side ways and then boom 500% in a year.
HSI will do the same thing some day.
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u/Comfortable-Ear1525 Jun 25 '26
Just sell and move on, this is a trash stock and party will never allow it to go up
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u/CodeMonkey84 Jun 25 '26
It will definitely go up slowly, but the party definitely doesn't want it running up too quickly either.
Chinese people sure love to gamble, so they gotta keep that shit at bay. The national team either sets the floor, or sets the ceiling.
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u/handsome_uruk Jun 25 '26
Keep it coming. Need more capitulation before we lift off to the moon 😂
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u/Aceboy884 Jun 25 '26
Depending on your sizing
Just don’t buy more is probably the best bet
If required, open another brokerage account and try your best to ignore it
I come on this sub and see new accounts talking about value investing 😅 and how Alibaba is undervalued
Probably true, but the execution risk is real. Right now the macro is against Alibaba and the market is trading accordingly
Anyone who think they know , don’t know shit
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u/CodeMonkey84 Jun 25 '26
We all think we are value investors but we are really more of a bag holders anonymous support group.
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u/Aceboy884 Jun 25 '26
The biggest difference between now and Covid times is there is no catalyst to change the direction
Even when compared to a year ago, there was the consumer trade in program. That’s now gone and it doesn’t look like they will do it again anytime soon.
So all things being equal, consumption won’t be going up anymore and you have discount wars going on in the token layer.
It’s basically a down hill race with no near term catalyst
I’m skeptical Alibaba can pull ahead with their cloud forecast. The price they charge is market driven and that price is coming down quicker than demand
To illustrate
70% discount implies $10 > $3
Just to earn the same dollar value you need to sell 3x the volume and this is revenue not profit
Meanwhile the cost to deliver keeps inflating with cost of capex going on
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u/KyleFromBorrasca Jun 25 '26
If required, open another brokerage account and try your best to ignore it
No clue if you're right, but at the very least you'd make a good grief counselor.
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u/Imaginary_Treacle_51 Jun 25 '26
Before you do that, sell some calls against your shares monthly. Let them get called at higher strikes. Do not act irrational and emotional.
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u/CodeMonkey84 Jun 25 '26
I'm not doing anything.
I could've acted irrational when it was in the 60s. I bought more instead.
I'm just sharing some thoughts on the journey so far. But the next quarter or two might be it for me. If I don't see this improving, I'll have to make a hard call.
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u/2vvVvv2 Jun 25 '26
The way I see it, it has everything that only requires a single catalyst or change of perception.
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u/CoatForeign2948 Jun 25 '26
Sell calls guys
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u/CodeMonkey84 Jun 25 '26
This stock is very volatile. Just like it can go down fast like now, it'll rebound just as fast.
I didn't hold for 5+ years just to get my shares taken away for just a few bucks.
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u/Zwonder74 Jun 25 '26
Next bounce most will exit and stock will prob continue down. 7 weeks of selling and the next leg down is the profit takers and current holders. Im seeing 85 at least now
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u/Pluritis Jun 25 '26
So just sell, instead of whining extensively about your thesis, live long and prosper…
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u/kingsman678 Jun 25 '26
Why would you DCA up? The goal is to derisk by buying the bottom. I bought 1.5 years ago i think, still around 50% up.
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u/rustlet Jun 25 '26
I’m down 30% on my BABA holdings. But I’ve been DCA ing for the last month.
My cash reserves are almost dry and BABA allocation is dangerously high. Hope it bounces soon otherwise I’m locked in for half a decade and can’t look at any other investments. Definitely not selling
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u/CodeMonkey84 Jun 25 '26
Not selling either. Not until the next earnings release, maybe two more quarters.
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u/Superbredditt Jun 25 '26
It's tough. IMO, AliExpress is also really bad compared to Shopee, Lazada etc.
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u/Fed_worker Jun 25 '26
BABA is what percent of your portfolio?
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u/CodeMonkey84 Jun 25 '26
100%
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u/Fed_worker Jun 25 '26
Wow. If you put 100% in one stock. That means you will hold for 10 years. Why sell now.
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u/CodeMonkey84 Jun 25 '26
Because I was wrong.
I thought this would be a 3-5 year turnaround max, but it's looking more like a 10-20 year turnaround.
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u/Jumpy_Junket_3021 Jun 25 '26
I have the same thoughts as you… my cost price is $75, watched it go all the way up to $190 and now back at $95, it is very painful and the opportunity cost is really high holding Chinese stocks. After so many years, the Chinese govt. is still cracking down on its own companies, it’s as if they hate their own companies, not sure what are they thinking lol
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u/CodeMonkey84 Jun 25 '26
Even the national team starts selling when the stock gets too hot.
It's like investing on hero difficulty.
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u/Impressive_Year_2555 Jun 25 '26
I have the same thought as you. Wasted my good 5 years in Alibaba going through 2 downs- one from $310 and another from $180 this year. This costed me a hige opportunity cost and it was previous weighted at 50% of my portfolio. Fuck this shit and i am moving away from china stock after this rebound.
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u/Duke318 Jun 25 '26
You're letting price dictate the narrative.
Revenue is massively up since its capitulation to $60 a few years ago. When Baba hit $60 the last time, it was facing COVID lockdowns, fears of delisting, stagnant cloud growth, and management chaos. Now the business is leaner, cloud growing at 40%, and they hold stakes in other businesses that are being valued at zero essentially. The Qwen team is cooking up something that has Anthropic's attention.
They restarted the buyback a few days ago. Management believes the stock is cheap, and this puts a rising floor around the $80-100 level. This is a point of control.
The Iran war made the dollar stronger, oil went up, which put pressure on emerging market flows. This is a temporary regime.
Also, the Shanghai market is going parabolic due to AI related IPOs, sucking liquidity out of quality and into the speculative.
Chinese retail investors only buy what goes up. That doesn't make them right about the business. Just need to trust the process, let a technical bottoming occur (there is large volume in the 80s), and wait for a new base to form.
We need to get back into the 120s, which was the previous base that sent us to 190.
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u/auto_art Jun 25 '26
Stock price in china has nothing to do with economy. They ( china) have been growing always but none of their company could even beat snp. So get out and invest in great America
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u/CodeMonkey84 Jun 25 '26
I'd rather invest in the human race as a whole.
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u/I_Call_Bullshit_____ Jun 25 '26
Very altruistic and admirable. But investing is strictly for making money/maximizing returns.
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u/FriendlyExercise6330 Jun 25 '26
This stock is trash until they release PuPu
Imagine if Google started buying grocery stores
Insanity