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What's going on?

Alibaba reported better-than-expected results on Thursday.

What does this mean?

Heres the good thing about Alibaba: its so big that at least one part of its business is bound to flourish come rain, shine, or government-mandated lockdown. This time, it was Taocaicai that came into its own, with the value of transactions on the fresh food platform booming more than 200% last quarter from the same time last year. And even though the rest of Alibabas ecommerce segment had a slow April and May, it recovered in June thanks in part to Chinas annual shopping festival. The companys cloud computing business made the best of a tough few months too, posting a 10% uptick in sales even as the government cracked down on multiple online industries. So while Alibabas revenue did fall marginally, investors knew it couldve been much worse, and they sent its US-listed stock up 6%.

Why should I care?

Zooming in: Change of plan.
This was Alibabas first drop in revenue on record, but analysts dont necessarily think itll become a habit. For one thing, Alibaba has recently promised to invest more in areas that are good for long-term growth. And for another, the Chinese government has realized itll need to let up on its anti-tech crusade and boost economic support if it wants to achieve its increasingly unrealistic growth targets.

The bigger picture: SoftBank runs for the hills.
The US has threatened to delist a host of Chinese companies from its stock market after they failed to stick to its disclosure rules. And its just added Alibaba to the line-up, which puts the company in a tight spot: a delisting would force some funds to sell its stock, which would send its share price tumbling. SoftBank doesnt want to hang around to see that happen: the investment giant has reportedly started selling forward contracts that could see it dramatically reduce its stake in Alibaba over the next few years.

Originally posted as part of the Finimize daily email.

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