May 3rd, 2022 | 10:41 CEST
Tech stocks - Where is the party over? Alibaba, wallstreet:online, PayPal
Table of contents:
"[...] The mere fact that we have to write off around EUR 5 million shows that mistakes were made. We have to admit this quite openly to ourselves. [...]" André Kolbinger, CEO, Smartbroker Holding AG
Alibaba: This China stock is in trouble
Alibaba's stock has lost about 12% of its value over the course of a month. However, it is imperative to see the development in the context of the rapid rise in the share price at the end of March. The bottom line is that the weak April for Alibaba may have just been a correction. For months now, shares from China have been under pressure. First, Beijing's increasing interference caused a bad mood, and then more and more investors withdrew their capital because of it, which brought the China stocks into additional disrepute. But what is the fundamental situation of Alibaba?
The Company is like a mixture of Amazon and eBay for the Chinese market. In addition, the Company also offers media and cloud services. In total, Alibaba has around 200 subsidiaries and employs 250,000 people. Due to its sheer size, Alibaba does not have to fear competition and has attracted many customers to its ecosystem, promoting intensive customer loyalty. Subsidiaries, such as its own logistics service provider Cainiao, perfectly complement the core areas and also earn money from the general trend towards more e-commerce. Alibaba remains a good stock. In the long term, however, the share is caught in a clear downward trend. In the short term, there are better alternatives.
wallstreet:online: Progress, misjudged by the market
When it comes to digital solutions, the name wallstreet:online always comes up among German small-cap investors. The company around the stock market portal of the same name has long had much more to offer than heated discussions about the latest hot stocks. The network now includes several financial websites and, with the Smartbroker, a brokerage solution that has been well received by customers and is intended to close the gap between modern neobrokers and established premium providers. In the meantime, Smartbroker is now 100% owned by wallstreet:online. That should be a prerequisite for additional business.
Months ago, wallstreet:online announced that it wanted to integrate securities trading even more closely with its own media offering. Since wallstreet:online is considered the largest publisher-independent operator of stock market portals, this integration could be worthwhile. While the competition has to invest lavish marketing budgets, wallstreet:online keeps the money within the company. In the second half of the year, the broker plans to relaunch and offer customers new products and an innovative user experience. While the stock market is not doing so well these days, this could be an opportunity: wallstreet:online seems well-positioned to score even in a challenging market environment. The stock is 27% cheaper today than it was a year ago. From a chart perspective, a cautious stabilization is emerging.
PayPal: Reasons for 60% loss in one year
PayPal has also been on a minimal upward trend recently - but with a loss of 62.2% over the year, the stock is still in a bad way. What is the reason for the sell-off? Shares like PayPal got a boost from the pandemic. In the meantime, however, revenue growth is no longer as significant. In the first quarter, growth was only in the single digits, after values of over 20% during the pandemic. But does that justify share price losses of around 62% over the year? PayPal continues to have a working business model. It is possible that the stock was significantly overvalued a year ago, which is why the crash seems at least understandable.
While both Alibaba and PayPal are severely battered in terms of chart performance from a long-term perspective, wallstreet:online's share price performance still looks positive on a three-year horizon. The share has lost ground but remains a success story. Since the Berlin-based company also seems to have a few operational arrows in its quiver, the stock could soon become interesting again.
Conflict of interest
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