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Today's big stories

Alibaba posted better-than-expected quarterly sales, but its recent fine from regulators weighed on its profitability
Twitter’s favorite “risk-free” bitcoin strategy isn't foolproof, but there's definitely something in it – Read Now
Xpeng reported strong quarterly results, despite an increasingly competitive Chinese electric vehicle market

Glutton For Punishment

What’s Going On Here?

China’s Alibaba posted better-than-expected quarterly sales on Thursday, but a record-breaking fine for the very, very naughty ecommerce platform gave its profitability a spanking.

What Does This Mean?

Shoppers might not have been able to head to the mall during the pandemic, but virtual stores like Alibaba’s were bustling. That resulted in an expectation-beating 64% surge in quarterly revenue for the company. And it seems to think that trend’s only going to keep going: its sales forecast for the next 12 months beat analysts’ estimates too.

Too bad, then, that it fell into loss-making territory for the first time since 2012. That was mostly down to the $2.8 billion slap on the wrist it received last month from Chinese regulators for “monopolistic behavior”. Throw in the turbulent time tech stocks are facing these days, and investors steered well clear.

Why Should I Care?

For markets: Alibaba isn’t out of the woods yet.
The fine – the biggest of its kind in history – marks the end of a four-month probe into Alibaba, but the threat of further action could cast a shadow over its shares for some time to come (tweet this). Regulators, after all, are still hassling payments giant Ant Group, in which Alibaba holds a roughly 33% stake. That might be why Alibaba’s US-listed shares have underperformed the tech-heavy Nasdaq by 4% since the fine was announced, even as the index suffers from an exodus of inflation-nervous investors.

The bigger picture: Coupang misses the mark.
South Korea’s ecommerce frontrunner Coupang admitted at its first update since its stock market debut that it was struggling with profitability too. Coupang reported growing losses despite the online sales boom, in part because it’s been spending more on hiring drivers and expanding its network of fulfilment centers. And as long as it prioritizes growing its market share by lowering product prices and delivery fees, some analysts reckon those losses aren’t about to reverse anytime soon.

You might also like: How to spot the best new investment opportunities in China.

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2. Analyst Take

Twitter’s Favorite “Risk-Free” Bitcoin Strategy, Explained

What’s Going On Here?

Twitter’s been ablaze lately with an easy-to-execute strategy that promises a guaranteed, risk-free annual return of over 15%.

Sounds too good to be true, right?

Well, actually, there is some truth to it. Whether the value of bitcoin goes up or down, this strategy would virtually guarantee you a return.

Trouble is, to make it truly risk-free, you’d need to stump up so much cash up front that you might just be better off just investing in bitcoin outright.

But here’s the thing: there are two ways to use this strategy to make the sort of returns they’re touting – as long as you’re flexible on the whole “risk-free” bit.

That’s today’s Insight: Twitter’s new favorite “risk-free” bitcoin trade, and why it might not actually be too good to be true.

Read or listen to the Insight here

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