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Photo: Reuters

Alibaba Shares May Fall by Another 50% Due to Chinese Economic Instability

Reuters reports that Shares of Chinese e-commerce giant Alibaba Group Holding Ltd, (BABA.N) which recently slipped below their initial offering price after having rocketed 75 percent in their first two months of trading, could lose another 50 percent of their value, Barron’s said in the cover story of its Sept. 14 issue.

The reasons the weekly financial newspaper gave for the dour outlook: China’s struggling economy, increasing competition in e-commerce and more scrutiny of the company’s culture and governance.

The company runs two big retail websites and recently warned of lower-than-expected transaction volumes, after having reported that volume growth in the June quarter declined to 34 percent from the 50 percent-plus rates of the past.

“That may only worsen as China’s economic growth drops to its lowest pace in six years,” Barron’s said.