What are the 3 risk of investing in Alibaba stock?

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Expert Solution

3 risk of investing into Alibaba stock are as follows-

A. Alibaba is having a highly concentrated business in China and it is not highly diversified in other economies so any downside to the Chinese economy would be leading to significant loss of investors and hence I would be avoiding investing in Alibaba due to lack of geographical diversification.

B. The growth of the business has not been significant in Alibaba as in case of Amazon, so I would not be investing into Alibaba because of lack of future growth and hence I will be refraining to invest it from the longer perspective.

C. Alibaba is also not undiversified into various numbers of sectors and it is highly concentrated electronic commerce player, so I would rather prefer to invest in Amazon than to Alibaba because of the lack of the product diversification also and uncertainties in the global economy.

jeff jeffy answered 1 year ago

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