Alibaba Group Stock In Focus Following $1.3B Sale Of Intime Stores: Retail Sentiment Brightens

Chinese retail giant Alibaba Group Holding’s ADR shares rose in after-hours trading session on Tuesday after the company said it was divesting its Intime Stores division for $1.3 billion, lifting retail sentiment.

The retail giant will reportedly book a $1.3 billion loss from the divestment, according to several media reports.  A consortium made up of Youngor Fashion and members of Intime's management team have bought the business for 7.4 billion yuan, Reuters reported.

The latest transaction is part of Alibaba's strategy to combine its domestic and international e-commerce businesses, and divest certain non-core assets. The move follows a revamp last year that split the company into six business units. The company also saw a series of top management changes following the revamp.

Alibaba, which has a 99% stake in Intime, had bought the company in 2017 for $2.6 billion in a bid to grow its physical stores segment.

Its other consumer sector assets up for sale include Freshippo and RT-Mart, according to a a Reuters report.

Retail sentiment on Stocktwits turned ‘bullish’ (57/100) from ‘bearish’ (28/100) a day ago.

BABA sentiment meter and message volumes on Dec 18 as of 3:06 am ET

Bullish sentiment among Stocktwits users centered around an expectation of an imminent price increase. Many retail investors are predicting a rally of Chinese stocks by the end of the year, according to an ongoing Stocktwits poll.

One user was predicting a $100 price target on Alibaba, another pegged a $120 price by year-end.

Last week, Alibaba stock rose on the back of optimism from China stimulus but caution set in as trade data from Chinese government showed falling numbers for November.

According to a recent Barron's report, Chinese exports in November increased by 6.7%, a decline compared to the 12.7% jump in October. That number didn’t take into account imminent tariffs that could impact a number of Chinese consumer stocks.

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