What's Going On With Alibaba Stock Thursday?

Alibaba Group Holding Ltd BABA is on the verge of losing its title as China's most valuable e-commerce company to PDD Holdings Inc PDD, an eight-year-old competitor. 

Alibaba's market value in Hong Kong dropped to about $187 billion, closely trailing PDD's $188.3 billion. 

This change reflects the challenges Alibaba faced following Beijing's 2020 crackdown on tech firms, highlighting the emergence of new players like PDD and ByteDance Ltd, Bloomberg reports.

Alibaba's co-founder Jack Ma, who has been relatively inactive, recently urged the company's staff to regain momentum, acknowledging the competitive pressure from PDD. 

Alibaba's struggle also reflected a need for more innovation and an inability to adapt to the anti-monopoly regulations, which prevented them from leveraging their size.

China had penalized Alibaba a record 18 billion yuan in 2021 for antitrust violations. In July 2023, China ended its regulatory overhaul on fintech affiliate Ant Group by imposing a penalty of 7.12 billion yuan.

The company's stock is trading near its yearly low, a steep decline from its peak in 2020. 

Internally, Alibaba has seen significant changes, including a corporate restructuring plan and leadership shifts. Meanwhile, despite rising marketing costs affecting margins, PDD has impressed investors with rapid growth and global expansion.

PDD's success is partly due to the shopping app Temu, which has quickly become a significant force in global e-commerce. 

In contrast, Alibaba's international expansion efforts through platforms like AliExpress have not matched the scale of its Chinese operations. Despite recent growth in its international business, Alibaba faces a challenging landscape reshaped by agile competitors.

BABA stock has lost 19% in stock value year-to-date.

Price Action: BABA shares closed lower by 2.70% at $74.67 on Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.