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Alibaba Stock Plunges Nearly 38% in Hong Kong Market
Subheadline: Market Stagnancy Follows Q3 Results Announcement
Alibaba Group's stock witnessed a significant drop of approximately 38% on the Hong Kong market (HSI) following its release of third-quarter (Q3) 2023 financial results. The decline occurred amidst a relatively flat market performance in Hong Kong.
Q3 Results Disappoint Investors
Alibaba's Q3 results fell short of analysts' expectations, with the company reporting lower-than-expected revenue growth of 2.7% year-over-year. The company attributed the slowdown to factors such as the impact of COVID-19 on consumer spending and increased competition in the e-commerce sector.
E-Commerce Growth Slows
The core e-commerce business, which accounts for the majority of Alibaba's revenue, saw its growth moderate to 3%, down from 10% in the previous quarter. The company cited a decline in consumer confidence and supply chain disruptions for the slowdown.
Cloud and International Business Impacted
Alibaba's cloud computing and international segments also faced challenges. The cloud business saw its growth slow to 4%, while international revenue declined by 10% year-over-year.
Market Sentiment Dampened
The weak Q3 results and subsequent stock drop have dampened investor sentiment towards Alibaba. The company's stock has now lost over half of its value since its peak in October 2020.
Long-Term Outlook Uncertain
Analysts are cautiously optimistic about Alibaba's long-term prospects. The company's dominance in the Chinese e-commerce market remains strong, and its cloud and international businesses have the potential for growth. However, competition and ongoing economic uncertainty in China may continue to weigh on the company's performance in the short term.
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