The stock of Chinese e-commerce giant Alibaba (BABA, Financial) traded lower during the second quarter. Though its core business remains strong—it reported organic revenue growth of 32% for the fiscal year ended March 20218—Alibaba faced a headwind in the form of an increasingly aggressive Chinese regulatory framework. Charged by officials with abusing its dominant market position, in April Alibaba was slapped with a record $2.8 billion fine (the equivalent of less than 1% of its market cap). Increased scrutiny has weighed on a number of the country’s tech heavyweights, many of which have also faced fines and other measures.
From First Eagle Investment (Trades, Portfolio) Fund of America's second-quarter 2021 commentary.
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