Analyst: Short Sellers Continue Betting Against Alibaba

Karl Loomes, market analyst for Astec Analytics discussed with Benzinga the rising short interest in shares of Alibaba BABA is something investors and traders should put on their radar. Loomes notes that since shares of Alibaba began trading on the New York Stock Exchange, borrowing volumes have been “climbing steadily,” implying short sellers are becoming more aggressive, even when shares began pulling back from its all-time highs. The analyst believes that short sellers are betting against the company's growth prospects and as such, expect to profit from a decline in share prices. “Most recently over the past week or two, as Alibaba shares have again rallied a little, borrowing has once again picked up the pace, reaffirming the idea that short sellers are still expecting it to go down,” Loomes told Benzinga in an e-mail. Loomes explains that borrowing in Alibaba shares has almost doubled since the start of October and increased 22 percent since a decline in share prices in mid-December, and has since climbed 13 percent in the last week.