Why Did Alibaba Group Holding Ltd (BABA) Shares Soar in Final 15 Minutes of Trading?


Shareholders of Alibaba Group Holding Ltd (NYSE:BABA) are a bit perplexed this afternoon as the stock climbed significantly in the final 14 minutes or so of trading on the day.

Shares jumped from $82.63 to $84.09 within minutes of the close, after already being up slightly for the day.

Alibaba Group Holding Ltd (NYSE:BABA) was not the only stock to see such rapid gains minutes before the market closed on Monday, and in fact numerous Chinese stocks rose in a similar fashion, led by Baidu Inc.

The move, although not apparent at first, stems from a decision by the MSCI Emerging Markets index to include U.S.-based Chinese stocks in its indices tomorrow, Dec. 1st. Analysts believe that this could equate to over $70 billion in capital streaming into these stocks.

The stock increased 3.42% or $2.78 during the last trading session, hitting $84.09. About 81.29M shares traded hands or 310.56% up from the average. BABA has declined 4.15% since April 27, 2015 and is downtrending. It has underperformed by 3.25% the S&P500.

Out of 22 analysts covering Alibaba (NYSE:BABA), 20 rate it “Buy”, 0 “Sell”, while 2 “Hold”. This means 91% are positive. $137 is the highest target while $80 is the lowest. The $93.19 average target is 10.82% above today’s ($84.09) stock price. Alibaba was the topic in 48 analyst reports since August 12, 2015 according to StockzIntelligence Inc. M Partners maintained the stock on October 30 with “Buy” rating. Axiom Capital maintained it with “Buy” rating and $92 target price in an October 28 report. Oppenheimer maintained the shares of BABA in a report on October 28 with “Outperform” rating. Brean Capital maintained the firm’s rating on October 28. Brean Capital has “Buy” rating and $98 price target. Finally, Wedbush maintained the stock with “Neutral” rating in an October 28 report.

Alibaba Group Holding Limited is a holding company. The company has a market cap of $207.36 billion. The Firm is principally engaged in online and mobile commerce through products, services and technology. It has 32.42 P/E ratio. The Firm provides retail and wholesale marketplaces available through both personal computer and mobile interfaces in the PRC and internationally.