Why Are Alibaba Shares Trading Lower Premarket?

The U.S. government is reviewing e-commerce giant Alibaba Group Holding Ltd's BABA cloud business to determine whether it poses a risk to U.S. national security, Reuters reports.
The U.S. focuses on how Alibaba stores U.S. clients' data, including personal information and intellectual property, and whether the Chinese government could gain access to it.
The U.S. is also concerned over the potential for Beijing to disrupt access by U.S. users to their information stored on the Alibaba cloud.
The report noted that a small office within the Commerce Department known as the Office of Intelligence and Security leads the probe into Alibaba.
Alibaba, the world's fourth-largest cloud provider according to Canalys research firm, has ~4 million customers and describes its cloud business as its "second pillar of growth." It saw a 50% rise in revenue to $9.2 billion in 2020, though the division accounts for 8% of overall sales.
Price Action: BABA shares traded lower by 3.78% at $126.60 in the premarket session on the last check Tuesday.

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