Alibaba's Tokenized Stock Plummets on Dilutive Share Offering
Alibaba's tokenized stock on Binance has plummeted to $116.98 after the company announced its largest-ever follow-on share offering, priced at HK$80 billion ($10.2 billion), a significant dilution that is weighing heavily on investor sentiment.
Last week's Q1 FY2027 earnings report showed a 75% year-over-year collapse in GAAP net income, but revenue grew 9% to $39.64 billion, topping consensus, and AI Cloud and Compute Services exploded 45%, the fastest growth rate in 22 quarters.
The dilution is a fresh wound for investors, with non-GAAP EPS of $1.26 missing the $1.94 consensus by a wide margin, but sophisticated accounts are running nearly 68% long positioning, and positive funding at 0.0298% means longs are paying to hold.
The bull case is anchored in a simple asymmetry: BABA trades at roughly 37% below the analyst consensus target of $187, with CEO Eddie Wu's stated path to AI capex breakeven within three years powered by in-house Zhenwu chips displacing third-party processors being a credible margin recovery narrative.
The bear case is not trivial, however, and if support breaks at $116, the next stop could be the immediate support at $114.04, opening a direct route to the strong support at $111.10.