BABA

7/23/2024

Current Stock Price: $76

Current Market Cap: $135 Billion

Short Term Price Target: $120

Long Term Price Target: $350

Potential Downside Risk: $70

$BABA announced it had re-purchased $4.8B worth of shares in Q1.

Cash is ~$87B

Debt is ~$23.5B

Total: ~$63.5B

Current market cap: $185B

In Q4 2023, $BABA paid $870 million in SBC.

That leaves a net buyback of ~$4B for the QUARTER! Now let’s do some quick math.

• $185B - $63.5B = $121B

• $4B * 4 = $16B/year buybacks

$BABA created ~$27B of free cash flow last year, which makes the $16B buybacks possible.

That means $BABA could buy back its entire stock within 7 years. (This assumes no growth in FCF and using 60% of the expected free cash flow, which should otherwise end up as cash)

Current price: $78.14

PT: $120

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8/15/2024

Alibaba Group Holding Limited (NYSE: BABA) reported its earnings for the first quarter of 2025 on August 15, 2024. Here are the key financial points from the earnings:

• Revenue: $33.47 billion, which was below the analyst estimate of around $34.81 billion to $34.95 billion, depending on different sources.

• Earnings Per Share (EPS): $2.26, beating the analyst estimate which ranged from $2.09 to $2.13.

• Stock Reaction: Following the earnings release, Alibaba's stock experienced a decline, with mentions of it being down 2% to 4% in pre-market trading.

• Cash Position: Alibaba had $84.44 billion in cash and equivalents as of June 30, 2024.

• Share Buybacks: There was mention of a $5.8 billion share buyback, indicating the company's commitment to returning value to shareholders.

Notes: Stock flat on the day. Very strong earnings and buybacks with no major impact to their cash position.

Theory: As recession fears takeover the US stock market, $BABA should see a lot more inflows compared to high risk stocks.

Theory #2: $BABA is the new dollar store/Ross/ Marshalls for Americans. As these American brands fail to provide products for a few dollars, consumer will steer towards Aliexpress, leading to growing sales while American companies prepare for a potential recession.

Current Price: $78.05

PT: $120

On 10/1/24 $BABA hit the stock price of $120. INTERSTELLAR VENTURES sold our entire position. Hope everyone enjoyed the ride.

NOT FINANCIAL ADVICE