Why This Investor Keeps Buying Alibaba Stock As It Falls

As China continues its crackdown on big tech companies, many investors are selling or avoiding Chinese stocks. But some investors with a healthier appetite for risk are salivating at the potential value investing opportunity.

Alibaba Group Holding Ltd BABA has seen its stock price cut in half and Lead Edge Capital's Mitchell Green is a buyer, he said Friday on CNBC's "Squawk Box."

Green has known the management team at Alibaba for a long time. In fact, he first invested in Alibaba when it was below $7 per share, he said.

As the stock fell sharply amid Chinese regulations, Green started buying at around $210 per share.

"Clearly, we were early," he said. He recently bought "a bunch more" around $157 per share.

"Over the next like six months, nine months, I have no clue where [Chinese] stocks are going, but I think over the next like three to five years, these things are much higher than they are today."

Related Link: Alibaba's Latest Offering Amid China's Renewed Tech Crackdown

Green told CNBC that China won't drive its companies into the ground because they want to "conquer the world," but the country wants the big internet companies to know that they are not bigger than the communist party.

"At least in the case of Alibaba, we like it," he said.

Alibaba had a market cap of about $450 billion, according to data from Benzinga Pro.

BABA Price Action: Alibaba has traded as high as $319.32 and as low as $152.80 over a 52-week period.

The stock is up 1.87% at $170.45 at time of publication.

Photo: courtesy of Alibaba.