Charlie Munger’s Daily Journal cut its stake in Alibaba by 50% in the first quarter

April 11, 2022 0 Comments

Daily Jornal, owned by legendary billionaire Charlie Munger, has cut its stake in Chinese e-commerce giant Alibaba by nearly 50%.

According to a regulatory filing on Monday, Daily Journal owned 300,000 American depositary shares (ADRs) in Alibaba at the end of March, down from 602,060 at the end of the previous year.

The Los Angeles-based company is known for its collection of papers and for selling software to customers that include justice agencies and courts. The business also holds a collection of stocks in addition to its operating businesses.

As a longtime China bull, Munger speaks highly of the Chinese government and is confident about Alibaba’s growth. 

In an interview with CNBC in last June, he express hope that the US financial regulators will be more like those of China, and he praised China’s response to the current health crisis. The billionaire said that while “our own wonderful free enterprise economy is letting all these crazy people go to this gross excess,” the Chinese “step in preemptively to stop speculation.”

In the first quarter 2021, Daily Journal initiated a position in Alibaba by buying 165,320 Alibaba ADRs and kept buying more during a time of weakness. At the end of 2021, the company held 602,060 shares of Alibaba, up from 302,060 shares as of September 30. The purchase price ranged from $111.96 to $177.7, with an estimated average price of $145.1.

The NYSE-listed Chinese company closed at $101.55 today, down 1.91%.

Daily Journal’s sell-off also coincided with the outflow of foreign money from China. Citing market data, Nikkei Asia reported that in the January-March period, foreign investors sold a net 38.4 billion yuan ($6.04 billion) of Chinese stocks and bonds, one of the highest such quarterly figures on record.

“Outflows from China on the scale and intensity we are seeing are unprecedented,” the Institute of International Finance said in a report published in late March. “Russia’s invasion of Ukraine may be pushing global markets to look at China in a new light.” It said the latest capital flight is “very unusual” as other emerging economies are not seeing similar outflows.

A resurgence in coronavirus cases in China, with Shanghai imposing strict lockdown measures, could fuel further flight of foreign investment from the country, said Nikkei Asia.

Leave a Reply

Your email address will not be published. Required fields are marked *