Summary
If you are an investor looking to purchase Alibaba shares, this article will discuss how to buy Alibaba shares no matter where you are. We will go through the pros and cons of trading this stock, the factors to consider when choosing a broker to trade with, the fees and commissions you are likely to come across when buying Alibaba shares, and some opinions from traders in social communities like Reddit and Quora.
Alibaba Group Holding Limited, or simply ‘Alibaba’ is a Chinese technology conglomerate founded on 28th June 1999 by Jack Ma in Hangzhou, Zhejiang, China. The main focus of the company is e-commerce, the internet, retail, and technology. Alibaba offers a large e-commerce store that serves as a platform for Chinese small businesses to sell and export their products to the global market. Due to the similarities in its business model and growth trajectory with the American company, Amazon, Alibaba is often referred to as the Amazon of China.
The company went public on 19 September 2014, with its Initial Public Offering (IPO) on the New York Stock Exchange raising $25 billion, making it by far the biggest IPO in history at the time, and giving the company a $231 billion dollar valuation. The share price at IPO was $68 per share. In 2022, Alibaba got approval from The Hong Kong Stock Exchange to list their stocks on the exchange.
Here are the most important steps to take when you want to buy shares of Alibaba from any country in the world.
- Select an Online Stockbroker
- Create a Brokerage Account
- Deposit Funds
- Buy Alibaba Shares
- Manage your Alibaba Positions
As with anything, there are advantages and disadvantages of investing in Alibaba shares. Here are some of the pros and cons of buying BABA shares:
Pros
- Constant Growth over the Years
- Profitable Company
- Portfolio Diversification
Cons
- Subject to Political Instability
As a trader, the research you do before you choose to start trading any shares could save you time and money when trading. Before you choose to buy a single Alibaba share, there are many factors you need to consider and research properly. Some of them are:
Commissions & Fees
When you choose to trade Alibaba shares or its CFD with a stock broker, you may have to pay some fees and commissions to that broker to help them run the platform smoothly. Some of these fees are direct trading fees and charges, while others are subtle non-trading fees that can be charged even if you don’t carry out a single transaction.
The most common fee you’ll come across is the spread, which is the difference between the ask and bid prices on a platform. A broker like eToro does not charge commissions for trading, but it offers low spreads on their stocks and other assets. Search your broker’s website to see the fees and commissions they charge and determine if you are willing to pay that amount.
Stock Brokers Regulation
Stockbrokers have to abide by rules and regulations set by financial regulatory bodies in the country or region they operate. These regulatory bodies set these rules to ensure fair transactions between parties involved, and also to ensure data security of traders on brokerage platforms. Regulated stock brokers are more trustworthy than unregulated brokers, as these regulations force them to insure traders’ funds and protect their personal information.
There are different regulatory bodies that can regulate a stock broker at any point in time, depending on your country or region. If you live in the United States, The Financial Industry Regulatory Authority (FINRA) is responsible for all stock brokers. The Australian Securities and Investments Commission (ASIC) regulates stock brokers in Australia, while the Financial Conduct Authority (FCA) regulates stock brokers in the UK. Check the websites of these regulatory bodies to confirm that your broker is registered under them.
Trading Platforms
These are computer software used by a broker to connect a trader to the stock market. They often contain tools necessary to carry out trading smoothly. If you want to buy Alibaba stocks, it is important to choose your trading platforms carefully. Just like any other software, the user experience of trading platforms is important to ensure smooth trading. Trading platforms also offer things like real-time news and notifications so that you can stay informed about the latest trends that can affect your trading decisions.
Generally, there are two classes of trading platforms, proprietary and third-party trading platforms. Proprietary trading platforms are created by brokers and used exclusively by traders registered with that broker. On the other hand, third-party trading platforms are free to all brokers and traders to use.
Leverage Availability
Leverage is a method of trading that involves borrowing money to open positions larger than what would be possible with just your trading capital. This means you have access to higher potential profit, but it could also mean a huge potential loss if things go wrong. For this reason, most regulatory bodies put a limit or cap on the amount of leverage available for traders when trading different assets, depending on the volatility of said assets.
If you are interested in trading with leverages, check to confirm that the broker you are trading with offers leverage before you start buying Alibaba shares from them. Also, confirm that they abide by the leverage restrictions in your country or region.
You can also check if the broker offers CFDs. CFDs are used for trading price movement of stocks without owning the stocks. They can be a great way to trade stocks but require leverage and some level of expertise and understanding of the stock market.
Alibaba Stock Performance
Alibaba stocks have grown and increased in value throughout the years for different reasons. It is important for you to research the current performance of the stock relative to the market and its competitors. To do this, research the stock market and other stocks in the same industry as Alibaba and see how they have performed in recent years. Compare their performance with Alibaba’s performance.
Also, it is important to do a little research on the company’s financials and see if they’ve been making profits or losses in recent years. Find out what might have caused these issues and see if that would be a problem moving forward.
Alibaba Past Dividends
Dividends are payments that companies pay to their shareholders as a portion of their profits, rewarding them for owning shares in the company. However, some companies may choose not to pay dividends because they prefer to reinvest their profits back into the business for growth, repay debt, or pursue other investment opportunities that have the potential to increase the value of the company and the share price of the stocks in the long term.
Alibaba does not currently pay dividends as they prefer reinvesting back into the company. If you are okay with this, you can buy shares in Alibaba. If not, consider investing in another company that offers stock dividends.
As mentioned earlier, you can choose to use either proprietary or third-party platforms to buy Alibaba shares. In recent times, proprietary trading platforms have gained more clout because they are more flexible and customizable than third-party trading platforms. However, third-party trading platforms like MT5 are still some of the most widely used platforms in the world.
You can access both platforms on your desktop and mobile devices.
Desktop Trading Platforms
Desktop trading platforms are computer software used for trading assets on your personal computer or laptop. They offer several advantages over mobile apps, primarily due to their larger screen size. This increased screen real estate provides a more comprehensive and detailed view of trading charts, data, and tools. It allows for multiple windows and tabs to be open simultaneously, enhancing multitasking capabilities. Additionally, the ease of navigation and utilization of keyboard shortcuts on desktop platforms further contribute to their advantage. Overall, desktop trading platforms offer a more immersive and efficient trading experience compared to mobile apps.
However, they lack portability, limiting trading to a specific location. In contrast, mobile apps allow trading on the go, providing flexibility and convenience. You can use proprietary trading platforms like eToro or third-party platforms like MT5 to buy Alibaba shares on your desktop.
Mobile Apps
Mobile trading apps are applications used for trading assets on a mobile device, like a smartphone or tablet. You can download a mobile trading app from your phone app store, like the Google Play Store for Android phones and the Apple Store for iOS devices.
These trading apps provide a distinct advantage in terms of portability, as they can be accessed from smartphones or tablets, enabling traders to engage in trading activities while on the move. This mobility allows users to monitor market trends, execute trades, and manage their investments from any location with an internet connection. Whether it’s checking stock prices during a commute or seizing trading opportunities while traveling, the convenience of mobile apps offers traders the flexibility to stay connected to the markets wherever they are.
On the other hand, they offer smaller screen real estate, which could be a limitation when trading. As a result, the choice between desktop and mobile platforms depends on individual preferences for screen size and the need for mobility in trading activities. You can download both proprietary and third-party trading platforms as mobile apps to trade Alibaba shares.
Buying Alibaba shares often costs more than just the amount needed to buy the shares. You have to pay charges and commissions to the broker you are trading with. There are two major kinds of fees you will pay to a broker when trading Alibaba shares: trading and non-trading fees.
Trading Fees
These are fees you pay only when you transact on a brokerage platform. Common examples of trading fees you might encounter when trading Alibaba shares are:
Spreads: Spread is defined as the difference between the buy and sell prices of an asset, in this case, an Alibaba share. This price difference is common with brokers that offer liquidity and add a little markup for offering their services to the trader. Spreads could be variable or fixed, depending on the broker, and can be affected by supply and demand and other factors. Most brokers put their estimated spreads on their website, so check them out before you start trading.
Commission: Brokers typically charge traders a commission fee for each executed trade, which can be either a fixed amount or a percentage of the trade’s value. For example, a broker could charge you $5 or 0.1% per trade. The commission fee is often disclosed upfront and varies between different brokers, making it crucial for traders to consider these costs when evaluating their overall trading expenses. Brokers like eToro and Capital.com are commission-free, so you might consider checking them out.
Overnight Fees: These are fees you pay for holding a leveraged position overnight. Since leverage trading involves borrowing money to hold a position, overnight fees act as interest payments for the borrowed funds to hold the position. Look out for these fees, especially if you wish to trade Alibaba stock CFDs.
Market Data Fees: Some brokers charge a little extra for providing traders with premium data services, such as advanced charting tools or specific market data packages. Some brokers like TD Ameritrade and Interactive Brokers offer this service to interested traders.
Non-Trading Fees
These are fees you pay without carrying out transactions on a brokerage platform. Some common non-trading fees are:
Inactivity Fees: These are fees you pay when you leave your account with no trading activity for too long, usually more than 3 months. They were created to encourage more active trading among investors on the platform.
Deposit and Withdrawal Fees: You pay these fees when you want to deposit or withdraw money to and from your trading account. These fees usually depend on the broker and your method of deposit and withdrawal.
Account Maintenance Fee: Some brokers charge account maintenance fees, also known as annual or quarterly fees, to cover the costs of maintaining your trading account.
Currency Conversion Fees: These are fees you pay when you want to convert your local currency into a more accepted currency for trading, like the US Dollar or Great Britain Pounds.
Transfer Fees: If you decide to transfer your shares from one broker to another, the current broker may charge a transfer fee. The purpose of this fee is to cover the administrative and processing costs of transferring the shares.
About Alibaba
Alibaba Group Holding Limited is a Chinese technology conglomerate that contains businesses, which offer e-commerce, cloud computing, and a wide range of other internet-related services to billions of people worldwide. It is mostly known for its sub companies like Aliexpress, Alimama, Tmall, Lazada, etc. which offer services to millions of Chinese and other countries globally.
The company was founded in 1999 by Jack Ma, a Chinese entrepreneur who was obsessed with the internet and its growth at the time. In October 1999, Alibaba received $25 million funding from Investor AB, Goldman Sachs, and SoftBank. Alibaba lived up the expectations of its early investors and became profitable in 2002, just three years after its launch.
On the 18th of September, 2014, Alibaba went public, offering its shares at $68, raising $21.5 billion for the company and investors. This IPO was the biggest ever in history at the time, worth more than Google, Facebook and Twitter put together. Since then, the company has grown in valuation and share price, as it continues to excel in offering internet and retail services to consumers globally.
As of August 2023, Alibaba has a share price of $88, with a market cap of $228.45 billion. There are 2.547 billion outstanding Alibaba shares owned by a wide range of investors, including institutions and the government.
We went through some of the threads on Reddit and Quora, two of the biggest social communities online to see what users thought about buying Alibaba shares.
Reddit Reviews
Reddit, one of the biggest internet communities, has many subreddits where people discuss stocks and other financial-related activities. We went through some subreddits to see what people said about how to buy Alibaba (BABA) shares and if they were worth buying.
On the subreddit r/stocks, we found an elaborate and well-written analysis of the Alibaba stocks from April 25, 2023. The Redditor responsible for the post gave the case for investors who want to go bullish on the stock and those who wanted to be bearish. He explained to the bullish investors that Alibaba was a dominant player in the Chinese economy, and they owned about 37% of market share in cloud computing. He also stated that they owned some younger ventures with potential to grow in a few years, and have been growing steadily yearly at a 30% rate. On the other hand, he argued that the crackdown of Chinese companies by the government was a cause for worry, as Alibaba has been on the receiving end of these crackdowns in recent times. 
Another Redditor agreed with the post, stating that while they believed in Alibaba’s potential, they were too scared to invest in Chinese companies due to the nature of their government.
Quora Reviews
We also visited Quora, another social community with a massive following like Reddit, to see what users there thought about buying Alibaba shares.
In one post, a user was asking if it was a good idea to purchase Alibaba shares. Another user responded, saying that while they thought the company was a good one, the Chinese government’s crackdown on businesses was too problematic, making Alibaba a risky share to buy.
Another user had another opinion, saying that Alibaba was highly undervalued and that they thought the shares would go up in value in the long term.
Bottom Line
If you are interested in trading stocks and CFDs from Chinese companies, Alibaba is definitely one to consider. In this guide article, we talked about how to buy Alibaba shares online by registering with stock brokers. We discussed the pros and cons, factors to consider, trading platforms to use, and fees and commissions you are likely to come across when buying Alibaba shares.
Traders from communities like Reddit and Quora are highly sceptical about investing in Alibaba stocks because of the probability of political crackdowns by the Chinese government. However, they agree that the company has great potential for growth, and investors should consider investing in them.
Q & A
Alibaba launched its IPO on the 18th of September, 2014.
Alibaba shares sold at $68 per share at IPO.
Alibaba shares have grown by approximately 34.71% since its IPO.
Alibaba was founded on 28th June, 1999
The largest shareholder of Alibaba is SoftBank, with a 24% ownership. Founder Jack Ma has a 4.8% ownership in the company, making him the second largest shareholder.
Yes, Alibaba is a profitable company, raking in tens of billions of dollars in profit yearly.
You can buy Alibaba shares from any broker that offers access to the Hong Kong or New York stock exchanges.
You can buy Alibaba shares by registering with a stock broker that offers access to the Hong Kong Stock Exchange. Search for Alibaba using its ticker symbol, BABA. Enter the amount you wish to purchase and click on “Buy” or “Trade”.
Yes, Alibaba offers share buy back to investors.
Yes, you can trade Alibaba shares with leverage.
Brokers like eToro, Capital.com, and TD Ameritrade provide excellent platforms for you to trade Alibaba stocks.
The current number outstanding shares for Alibaba is 2,600,625,000.
Alibaba is listed on the Hong Kong Stock Exchange and the New York Stock Exchange.
The minimum amount of Alibaba shares you can buy depends on the stock broker you trade with.
The current price of Alibaba shares at the time of writing is $91.60
Alibaba shares can be a good buy for you if you are looking for good stock growth over the years. However, it is subject to a lot of political risks. You should consider both risks and benefits of the stock before choosing to invest.
