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Traders go gaga over BABA!

September 18, 2014: 1:23 PM ET
Traders can't wait to buy Alibaba's stock ... and they are expressing their excitement on social media.

Traders can't wait to buy Alibaba's stock ... and they are expressing their excitement on social media.

The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.

How's this for meta? The chatter on social media (particularly on Twitter) seems to show that investors are a lot more excited about the Alibaba (BABA) initial public offering than they were for Twitter's (TWTR) IPO last November.

Igor Gonta, CEO of Market Prophit, a firm that analyzes social media posts and blogs and ranks people based on the performance of their commentary, called sentiment for Alibaba "phenomenal."

Gonta noted that the big difference between Alibaba and Twitter is that even the skeptics expect Alibaba to be a huge hit on its first day of trading. That's certainly the case with famed Silicon Valley investor Peter Thiel, who told CNN he wouldn't buy Alibaba, but he predicts a bounce on Friday.

"The Alibaba naysayers who say they are not believing the hype are still bullish," Gonta said. "This thing is just such a monster."

It's understandable why investors are enthusiastic. Alibaba is profitable and growing rapidly and its presence can be felt throughout pretty much the entire Chinese e-commerce sector. Alibaba is not just about potential like many IPOs often are.

Related: All you need to know about Alibaba's huge IPO

One fan on Twitter thinks the stock will have a pretty big pop and cites numerology as a reason.

Don't laugh! My colleague Sophia Yan had a great story a few months ago where she spoke with fortune tellers in Hong Kong about the role luck could play in the IPO.

And that $80 target is actually conservative. Gonta said that there are some traders predicting that the stock could go as high as $100 on its first day.

Alibaba is also expected to have a big impact on other high-profile tech stocks. Some of the top tweeters tracked by Market Prophit, including traders going by the handle of @udgstocks and @sethque, are also hoping that Yahoo (YHOO) will continue to surge after Alibaba starts trading.

Related: It's put up or shut up time for Yahoo

That's because Yahoo owns a more than 20% stake in Alibaba and will be selling a portion of its investment to use for a share buyback and possibly some of its own acquisitions.

Over on StockTwits, a platform dedicated solely to talking about investing, one trader suggested that Japan's SoftBank (SFTBY), which owns more than 35% of Alibaba and is not selling any shares, is also a good bet. A lift in SoftBank's value could also help Sprint (S), the struggling U.S. telecom that SoftBank controls.


$BABA $SFTBY is the best choice for an investor. You get BABA and $S and other promising companies with a DISCOUNT

It's hard to find too many BABA bears on Twitter and StockTwits. There are some professional investors who are looking to shy away though. And that might be the right call.

Related: 5 risks for investors buying Alibaba shares

It's worth remembering that the last IPO that was this hyped -- Facebook (FB) -- was a dud on its first day of trading. And despite lower expectations, Twitter actually surged 73% on its first day.

One StockTwits user expressed concern about the lack of any negativity heading into Alibaba's big day.

$BABA There are far too many people going into BABA tomorrow. I was incredibly excited but now i'm just worried.

Of course, Facebook has more than bounced back from its lackluster debut and a couple of rough months immediately after the IPO. The stock has more than doubled from its offering price and Facebook is now worth $200 billion.

So don't judge whether or not Alibaba is a success or a dud on how it does Friday. It's what Alibaba does over the long haul that matters, and there is reason to believe that the company has a bright future ahead of it.

$YHOO $BABA is a real co with 15-yr track record of real growth and profits. This isn't a fly-by-night "gambling" scam, lol.

Reader Comment of the Week! I had a lot of fun on Wednesday covering the Federal Reserve's statement/dot plot/exit strategy/Yellen press conference. It was my first time reporting from the Fed building in DC.

I was a little bummed though that I did not get to ask Yellen a question during the press conference despite repeatedly thrusting my hand upwards like Hermione Granger in Professor Snape's potions class.

Maybe the Fed will indulge me at the next presser in December. Until then, my Reader Comment of the Week goes out to the follower who I think suggested the best question for Yellen. I would have asked it.

Great point. To clarify, I assume you mean monthly CPI less than 1%? It was actually down in August but up 1.7% over past 12 months. But your point is well taken. We may not see classic, textbook inflation in the form of wage growth or sharply higher prices for some common consumer goods.

But many people are struggling to keep up with the mounting costs for vital services like health care and education. I'd love to find out if Yellen thinks there is a better real-world metric to gauge inflation than CPI.

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