BABA shares jump on metaverse investment

  • Alibaba has created a new unit to focus on the metaverse.
  • BABA stock jumped more than 4%.
  • The Chinese retail giant to hold investor meeting on December 16-17.

The dim news flow surrounding Alibaba (BABA) on Monday was pushed to the side on Tuesday after it was reported that it has created a new metaverse unit.

The website reported that Yuanjing Shengsheng would lead Alibaba’s venture into the metaverse. The stock jumped more than 4%. BABA shares were down 0.5 percent at the outset on Tuesday. Earlier this week, Alibaba management fired a worker who reported being raped by a coworker on a business trip. BABA shares plummeted 2.3 percent to $122.24 after the news broke on Monday, but is again trading near $127.



Investing in the metaverse

After major announcements by Nvidia, Baidu, and Tencent this year. Much of global mega-tech has shifted its focus to the metaverse. In addition just two months ago, Facebook’s parent firm changed its name to Meta Platforms in an effort to become the new sector’s leader.

South China Morning Post, owned by Alibaba reported: “Yuanjing Shengsheng’s launch comes barely two months. After Alibaba’s cloud gaming business group unveiled a new brand with a similar name that bills itself as a cloud gaming platform. Alibaba stated at the time that the platform will provide small to medium-sized cloud game developers with free computing resources.”

According to the Post, a business intelligence organization called Qichacha discovered that Alibaba has been trademarking numerous metaverse-related brands such as “Taobao Metaverse” and “Ali Metaverse”. Alibaba may launch its own e-commerce and gaming metaverse applications.

The news has taken the sting off of the company’s decision to terminate a female employee who publicly revealed she had been raped by a coworker and perhaps a client on Monday. The employer claimed in the dismissal letter that the employee lied about the company and her case, making the company look bad. The account lends credence to public beliefs that Alibaba was attempting to suppress the woman and conceal the situation.

Alibaba will hold a virtual investor presentation on December 16 and 17.

BABA needs to eclipse $130

For the past week, BABA shares have been consolidating in the low $120s. It’s critical that the stock rises above $130 in light of the metaverse announcement. In the absence of this, the stock could fall back to support at $109 this week.

Two weeks ago, BABA’s stock price fell to a four-and-a-half-year low near $109. “If BABA cannot close above $130 this week, and even if it does, we would expect BABA to once again retest $109,” we wrote last week.

BABA price movement must push the stock over the 21-day moving average, which is now at $133.63, to turn things around. On Monday, the Moving Average Convergence Divergence (MACD) broke into positive territory, indicating the start of a rally higher in the stock price.

However, the market will require increased volume, which has recently decreased. In each of the last five sessions, fewer than one million shares had changed hands.

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