Alibaba Group Holding Ltd (NYSE:BABA) is down 1.3% to trade at $117.77, after the China-based e-commerce giant announced a massive $10.2 billion share sale to non-U.S. investors in order to fund artificial intelligence (AI) projects.
The shares are looking to extend Friday's 8.6% drop, though the 60-day moving average looks ready to contain today's losses. Year to date, the equity is down 19.1%.
Analysts are overwhelmingly bullish on Alibaba. Of the 26 brokerages in coverage, 22 carry a "buy" or better rating, compared to just four "hold" recommendations.
Options traders have been unusually bullish as well. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and Nasdaq OMX PHLX (PHLX), BABA's 10-day call/put volume ratio of 5.65 ranks higher than 99% of readings from the past year, showing calls have been picked up at a much faster-than-usual pace.
It's also worth noting that Alibaba stock's Schaeffer's Volatility Scorecard (SVS) sits at 94 out of 100, suggesting BABA has consistently realized higher volatility than its options have priced in over the past year.
