- Ryan Cohen is a activist investor who became a meme icon after acquiring approximately 12% of GameStop’s shares.
- Cohen has built a sizable stature at Chinese e-commerce giant Alibaba since last year.
- Alibaba shares are up more than 25% since the Cohen deal was announced.
Figure 1: Why Meme Tycoon Ryan Cohen Is Investing in Alibaba Stock
Courtesy of Ryan Cohen | Photo by George Kamper
Also Read: 3 Ways AMC Shortsellers Fail
Did Ryan Cohen Buy Alibaba Stock?
Notorious activist investor Ryan Cohen is currently chairman. game stop (GME) – Get Free Reportspending hundreds of millions of dollars Alibaba (baba) – Get Free Report according to, wall street journal.
Cohen will start building its position among China’s e-commerce giants in mid-2022. Since then, Alibaba’s stock has risen about 25%, increasing its market capitalization by $140 billion, according to Bloomberg.
It is speculated that Cohen has already benefited greatly from his position.
And apparently, Cohen is already showing signs of being an activist investor. He is now pushing for further share buybacks, according to insiders.
In addition to Alibaba, Cohen also apple (AAPL) – Get Free Report Bull. The investor has invested most of his fortune in his iPhone maker and is currently the largest individual shareholder with 6.2 million shares (currently valued at about $1.6 billion).
Through a holding company, RC Ventures, Cohen owns approximately 9 million shares of GameStop.And last year he bought 2.7 million shares Bed Bath & Beyond (bbee) – Get Free Report However, he sold his position a few months later.
Why Ryan Cohen Is Buying Alibaba Stock
Cohen’s investment may seem unusual, but it’s no surprise that he’s buying stock in e-commerce companies. After all, he has a wealth of experience in the field thanks to his role as the founder and former CEO of Chewy (CHWY).
In a recent speech, Cohen made it clear that he prefers to invest in companies whose valuations are well below their business fundamentals. He also dropped some hints that he had been keeping an eye on the Chinese market for some time.
A few months ago, Cohen tweeted about China, saying he was “in love” with it. In another tweet, he called China a “sleeping giant.”
The timing of Mr. Cohen’s investment in Alibaba also seemed ideal, as Chinese stocks soared as China’s economy reopened. From late October to today, iShares MSCI China ETF (road) – Get Free Report It rose nearly 50% as the country eased its strict zero-COVID policy.
According to Vey-Sern Ling, managing director of Union Bancaire, Ryan Cohen’s big investment in Alibaba will attract foreign investors who have been skeptical of China’s geopolitical situation in recent years. , bodes well for equities.
Should Individual Investors Buy BABA?
Alibaba is about 50 times the size of GameStop and has a market capitalization of $303 billion. Of the approximately 1.85 billion shares available, approximately 35% belong to the general public (individual investors).
Figure 2: Owns an Alibaba float.
simply wall street
Therefore, it is unlikely that we will see another “meme stock” move in Alibaba.
Like other large corporations, Alibaba’s stock price is mostly determined by institutional investors.
GameStop and AMC Entertainment (AMC) – Get Free Report It was a paradigm inversion. Individual investors ended up holding more assets than they “should”, pushing up stock prices and attacking short selling.
On the one hand, if you look at Alibaba’s business fundamentals, it’s definitely an undervalued stock. BABA has received strong ‘buy’ ratings from all analysts covering the stock over the past three months.
Consensus suggests a median increase of 20% by 2023.
Figure 3: BABA stock 12-month forecast.
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(Disclaimer: This is not investment advice. The author may own one or more of the stocks mentioned in this report. Also, if the article contains affiliate links, These partnerships do not affect editorial content.Thanks for supporting Wall Street Meme)
