Alibaba is a Chinese online commerce company that matches consumers, merchants, and wholesalers through a single platform. The company went public in late 2014, with its IPO raising just over $21 billion.
It now has a market capitalization of over $520 billion, making it one of the largest companies listed on the New York Stock Exchange.
In this guide we show you some popular brokers to buy Alibaba stock from, as well as the steps required.
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Where to Buy Alibaba Stock
As Alibaba is now one of the most valuable publicly-listed companies in the US, hundreds of online stock brokers allow you to buy and sell its shares. But when choosing an online stock brokerage from whom you can buy Alibaba shares, you have to put into account such factors as regulations, spreads, commissions, customer support, and payment methods. To help find the right broker, we have reviewed what we consider the best three stock trading websites currently selling Alibaba stocks here:
Provider Detailed Review
1. eToro – Best Stock Broker for Worldwide Customers
eToro is an online broker that specializes in stocks and shares, forex, and CFDs. The platform is ideal if you are just starting out in the world of online trading, as eToro has been designed to facilitate newbies. Opening an account takes minutes, and the automated verification process simply requires an upload of your passport or driver's license. You can open an account by depositing a minimum of $50, which you can do via a debit/credit or e-wallet. Bank accounts are also supported, although wire transactions take a few days to materialize.
eToro also makes it to our list of recommended brokers is that it offers a cost-effective pricing model. Not only are its spreads low, but you can also buy Alibaba stocks commission-free. Although you need to pay $5 to request a withdrawal, this is more than reasonable.
eToro is also licensed and regulated by several top tier financial regulators including FCA in the UK, ASIC in Australia, and CySEC in Cyprus. What we also like about the platform is that it allows you to engage in automated trading. Once you've chosen a trader that you wish to mirror, the broker will then copy the user's trades like-for-like. This is handy if you want to buy additional stocks but you don't know which companies you want to back.
- Catered to newbie traders
- 0% commission on ETFs and stocks
- Supports heaps of everyday payment methods
- Minimum withdrawal of $50
- High spreads
- MT4/5 not available
2. Plus500 – Trade Alibaba Stock CFD commission-free
Plus500 is a UK-based broker that accepts investors from numerous countries around the world. Plus500 is also licensed and in multiple jurisdictions including Australia, South Africa, Singapore and Cyprus. Its parent company is also listed on the London Stock Exchange and the online trading platform, Plus500 is authorized and regulated by the FCA. When it comes to investing in Alibaba, you will be doing so via a CFD (Contract-for-Difference).
This means that you will not own the underlying asset, so you wouldn't be eligible for company dividends. With that said, Alibaba is yet to pay dividends to shareholders, so you're not missing out. The upside to CFDs trading is that they allow you to short-sell Alibaba stock, as well as apply leverage. Opening an account with Plus500 takes minutes, and you only need to meet a minimum deposit of $100.
Supported payment methods include a debit/credit card, bank transfer, and PayPal. Much like eToro, Plus500 does not charge any trading commissions. However, some of its variable spreads can be expensive, so be sure to trade during standard market hours to keep this to a minimum.
- Fast order execution
- It also allows for commission-free trades
- Access a wide range of trade and market analysis tools
- Stocks only available via CFDs
- Limited research and educational resources
3. Stash Invest – Best USA Broker With Low Deposits
If you're a newbie trader based in the US, it might be worth exploring the merits of Stash Invest. The domestic share dealing broker allows you to open an account by depositing just $5. Additionally, Stash offers fractional shares at no additional cost. This means that you can buy Alibaba stocks with super-low stakes and then diversify the rest of your balance by investing in additional companies.
Unfortunately, Stash Invest does not allow you to deposit funds with a debit/credit card or e-wallet. Instead, you will need to link the app with your US checking account. Stash Invest offers its cheap stock dealing services in return for a monthly fee. This starts from $1 per month for the standard investment account.
If you want all of the features offered by Stash, this goes up to $9 per month. A slight pitfall of using Stash is that you will only have access to the US stock markets. Note also that Stash Invest is a mobile-only stockbroker, so you'll need to have an Android or iOS operating system to install the app.
- $5 minimum deposit
- Allows fractional stock purchases
- Monthly fee from just $1
- Limited number of shares hosted
- No access to international stock exchanges
How to Buy Alibaba Stock
If you’re looking buy Alibaba stock, below we have listed a step-by-step guide to show you what you need to do. If you’re looking to join one of the other brokers that we have recommended on this page, the process remains largely the same.
Step 1: Search for Alibaba (BABA) Stock
At the top of the screen, you should see a search box. Simply enter ‘ALIBABA’ and click on the corresponding result.
Step 2: Click on ‘Trade’
You will now see a range of information linked to Alibaba, such as historical prices and research tools. Simply click on the ‘Trade’ button and you will be taken to the investment page.
Step 3: Set-Up Order and Buy Alibaba Stock
On the pop-up buy/sell window, set up your trade parameters.
To fill out the order box correctly, read through the following guidelines.
- Amount: Don’t make the mistake of entering the number of shares that you want to buy. Instead, the ‘amount’ box refers to the amount of Alibaba stock that you wish to buy in USD. So, if you want to buy $150 worth of shares, enter this into the box.
- Set Rate: This refers to the price that you wish to enter the market. If you simply want to take the next available price, leave this set to ‘market order’. If you want to specify a particular entry point, change this to ‘limit order’.
- Stop Loss: Stop-loss orders ensure that you mitigate your risks when the market goes against you. You get to specify the price that your Alibaba stocks are automatically sold at. Although not mandatory, we would strongly suggest that you insert a stop-loss order.
- Take Profit: Take-profit orders work in the same way as stop-loss orders but in reverse. As the name suggests, they allow you to lock in your profits automatically. Simply enter your target price into the box.
Finally, click on ‘Buy’ to complete your order.
Why Do People Invest in Alibaba?
You are best advised to perform your own research before investing in Alibaba.
Highly Diversified Business Model
There are a lot of similarities between Alibaba stock and Amazon stock. Not only do the two firms have online retail as their core business model, but they are both highly diversified. For example, much like Amazon, Alibaba is making great strides in the ever-growing cloud computing market.
Similarly, Alibaba also has a stake in the online food and grocery space, albeit, its core focus is in the Chinese market. The company is also increasing its exposure to the digital media sector. This includes sports streaming and a recent licensing deal with Disney.
Unprecedented Growth Continues
We often find that newly listed tech stocks will go through a rapid few years of exponential growth until they reach a plateau. However, this couldn’t be further from the truth in the case of Alibaba. For example, in the company’s most recent earnings report of February 2020, Alibaba reported a staggering 47% increase in quarterly profits.
Not only this, but sales rose by 36%, and its core retail platform attracted an additional 2.5 million customers. These numbers are nothing short of unprecedented, especially when you consider that Alibaba has been trading since 1999.
Huge Cash Reserves
Unlike a number of other tech stocks with multi-billion dollar valuations (think Lyft and Netflix), Alibaba has a super-strong balance sheet. At the time of writing, this amounts to cash reserves of $30 billion, which is huge.
As per the company’s proposed listing on the Hong Kong Stock Exchange, analysts predict that this will raise a further $11-$13 billion to its already beefy balance sheet. This gives Alibaba a huge war chest to continue its diversification strategy and ride out the storm of the Coronavirus pandemic.
About Alibaba Stock
Company and Stock history
Alibaba was launched in 1999 by Jack Ma, a Chinese national who was required to raise $80,000 to start his online e-commerce empire. Fast forward to 2020 and Jack Ma is now one of the richest people in China, with a net worth of $47 billion. Alibaba itself is an online marketplace that seeks to match retailers, wholesalers, and consumers.
Much like Amazon and eBay, sellers that use the platform will pay Alibaba a commission fee when sales are made. Similarly, Alibaba utilizes a rating system that allows buyers to view previous transactions. Although Alibaba is a company based in China, when it went public in 2014 it opted for the New York Stock Exchange.
At the time of going public, Alibaba was valued at just over $21 billion, and stocks were sold at $68 per share. Alibaba shares are now worth $194. However, the company has engaged in multiple shares splits since its launch, and its market capitalization now stands at $521 billion.
Alibaba was in an all-time high territory in January 2020 when it hit $227, albeit, the shares have since retreated ever so slightly.
Stock market commentators will often point towards the similarities between Alibaba and Amazon. As we noted earlier, both companies have online retail as their main business focus, and both companies are highly diversified. Although Amazon has strong dominance in this space globally, it is important to remember that Alibaba is involved in wholesale goods, while Amazon targets the retail sector. As such, the two companies are not in direct competition per-say.
Alibaba is still reporting record numbers in the form of operating profits, sales, or customer acquisition, the company continues to soar above the Wall Street expectations. It is also important to remember that Alibaba is in the midst of a huge diversification strategy that has seen it gradually avoid its over-reliance on e-commerce.
This includes large investments in cutting-edge technologies like cloud computing. Even more importantly, if Alibaba can make a success of its online grocery delivery service in China, this could be a game-changer. If you decide to invest in Alibaba stocks, you will only be able to make money via capital gains; this is because the company is yet to distribute dividends to shareholders.
Had you invested in Alibaba stocks back in 2014 when the company first went public, your investment would have grown by over 2,300%. This is an incredible amount of growth to experience in just five years.
With that being said, there is no sure-fire way of knowing just how big Alibaba can get. You won’t be getting any dividends from the company, so you will need to rely exclusively on its stock price smashing through new all-time highs. As such, we would suggest performing your own research on Alibaba prior to parting with your money.
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Glossary of Stocks Terms
A stock is a representation of a company’s equity. When a company wants to raise capital, it issues stocks to the public. It is the aggregation of the total stocks owned by one individual that inform their shareholding of the company.
A share is an indivisible unit of capital that expresses the ownership relationship between a shareholder and a particular company, mutual fund, REITs or limited partnership. A share indicates a portion of ownership (claim) that one has on a company or fund.
Dividend refers to the portion of the company’s profits that is distributed to its stockholders. It can be on a quarterly or annual basis.
A bull market is an economic condition where the stock markets are in an extended period of consistent increase in stock prices.
A stock market is said to be bearish if it is involved in extended periods of continuous price decrease of the stock prices.
A stock exchange is an institution or a platform where shares and stocks and a host of other money market instruments are traded.
The return on investment is the profit you make from trading in or investing in shares and stocks of a particular company. It often comes from selling the investment at a higher price than was originally bought or benefiting from dividends and other profit-sharing schemes as a result of owning and holding onto a particular investment.
A broker may be a person or entity that engages in the buying and selling of different types of investments on behalf of other individuals or entities at a fee (or commission).
Day Trading is the practice of buying a money market investment product and selling it as soon it reports price increase or loss, within the same day. Traders engaged in day trading are referred to as “day traders” or “active traders”
Arbitrage is the act of buying and selling security at different stock exchanges or markets with varying prices. If, for instance, stock ABC sells at $11 on one exchange and $11.75 on the other, arbitraging involves buying from at the low price exchange and profiting by selling it at the higher-priced exchange.
A stock index is a statistical measure of the change in the stock and securities market. It comprises a hypothetical portfolio of different companies whose change in prices is calculated to determine market performance.
The Initial Public Offering refers to the sale of company stock to the public for the first time. It is the act of taking a company public and is highly regulated by such financial regulators like the SEC in the USA and FCA in the UK.
Options are derivative financial instruments whose price is based on the value of their underlying tradable security like shares and stocks. They are contracts that give the holder an option to buy or sell the underlying asset at a later date. Unlike futures, an options contract holder has the choice to buy/sell or not.
This is an options contract that gives the holder an option to buy the underlying asset before the expiry date.
This option gives its holder the choice of selling the underlying asset before its expiry date
A mutual fund refers to a company that pools funds from different investors and invests these funds in stocks, bonds, and other financial market securities. They then distribute the capital gains from these invests to their members.
The process through which stocks for companies that are not listed with accredited stock exchanges like the NYSE are traded. It is a broker-dealer network for unlisted stocks for companies that do not meet listing requirements set by the organized exchanges.
A stock is said to be overbought if it is traded excessively over a short period of time and at unjustifiably high prices.
A stock is said to be oversold if it is consistently traded below its true value.
Also referred to as the offer or asking price, this refers to the lowest price that the seller will take for a stock.
Bid price refers to the maximum price that a buyer is willing to pay for a stock.
In the stock trading context, Volume refers to the number of shares that change hands within a given period of time, be it a day, month or annually. It is trading/investment indicator where rising trade volumes point to a healthy stock while dwindling volumes are indicators of investor pessimism towards a stock.
Refers to the statistical measure of the change in price of a stock over a given period of time. It is a measure of the rate and the time it takes for a stock price to move from high to low and how long it remains within a certain price range. The higher the volatility, the higher the risk.
This refers to the highest closing price recorded by a given stock in the last 52 weeks.
This refers to the lowest closing price that a particular stock recorded in the last 52 weeks.
The bid-ask spread refers to the difference between the lowest price that a seller is willing to take for their stock and the highest price that a buyer is willing pay for the stock. It is the difference between the quoted ask and bid prices.
A market order is an instruction by an investor to the broker or brokerage platform asking them to buy/sell a stock or any other security at the best price available at that moment. It is often issued when an investor wishes to enter or exit the market quickly and at the prevailing rates.
A limit order is an order that triggers a sale or buy when a predetermined or better price is met. For a buy limit order, the buy order is executed once the set limit price or a better price is triggered. The sell limit order on the hand triggers the sale of stocks if the limit price or better price is hit.
Also referred to as a stop loss order, it is an order that triggers a buy or sell action once a predetermined price level is hit. It is designed to help you minimize possible loss on a given trade should the markets move against your bet.
Take profit is a type of limit order dictating the price level at which the broker or brokerage platform is to close a trade for profit.
Capital gain refers to the value rise of a tradable financial instrument that makes its selling price higher than the buying price. It can also be referred to as the profit realized from liquidating a capital investment like stocks.
An ETF is a collection of many tradable instruments like bonds, stocks, and commodities. These are listed on the exchanges and traded like ordinary stocks.
The debt-to-equity (D/E) ratio is a financial ration tool used to measure the financial health of a company by gauging value of its equity in relation to debt. It is achieved by dividing the company’s total liabilities in relation to its shareholder’s equity.
This is an investment strategy where the investor only buy shares that have consistently paid out high dividends in the past or others with the fastest dividend rates. Dividend investing strategy advocates are more interested in how much a shares pays in dividends than its price fluctuations.
Growth stocks refers to the stocks of companies that are expected to grow at a faster rate than the industry average and report consistent and sustainable cashflows. The company sales and revenues are also expected to increase at a faster than that of an average company in the same industry.
These are also referred to as micro-cap or nano-cap stocks and refers to the stocks of relatively small companies valued less than $5 and only trade via the Over-The-Counter markets.
A blue chip refers to a nationally recognized and financially sound company with a long and stable record of consistent growth. It is company whose financial might and nature of operation make it well suited to face turmoil and remain profitable in the uncertain economic conditions..
Short selling is a trade/investment strategy where the investor is banking on the decline of the shares of a particular company. They therefore borrows these shares, sells them at the current market price and buys them back after they lose value, effectively profiting from the price difference.
Yield refers to the profit/earnings generated from investing in a particular stock or market instrument over a given period of time and is expressed a percentage of the stock’s market value, face value or as percentage of invested amounts.
Capital stock, also referred to outstanding shares, refers to all the regular shares issued by a company and held by all its shareholders including the restricted/locked-in shares held by company insiders, executives, and institutional investors. The number of capital stock is used in calculating key metrics including cash-flow per-share and earnings per share.
EPS refers to the monetary value, the profit or earnings attributable to each outstanding shares held by a company. It is a financial ratio that is arrived at by dividing the company’s profit by its outstanding shares of the common stock.
Also referred to as Price-to-earnings ratio, PER is a financial metrics tools used to check if a company’s shares are over/undervalued by dividing the shares current market price with its earnings-per-share.
A company’s flat refers to the number of regular shares issued to investors that are available for trading. The float shares figure is arrived at by subtracting the locked-in shares held by company insiders and executives from its capital stock.
Gap up stocks refer to company stocks that open the day trading at relatively higher prices than their previous day’s closing price. This is often attributed to the after-market trading activity.
Gap down stocks refers to company stocks that open the day trading at relatively lower prices that the previous day’s closing price. For instance if a company stock closes the day trading at $50 but opens the following day trading at $45, it is said to have a 5-point gap down.
Stock buyback, also referred to as share repurchase, occurs when a publicly listed corporation uses a part of its revenues to buy back its shares from the marketplace. The move effectively reduces the number of company shares in circulation, which translates to an increased share price.
HOLD is a financial recommendation issued by a qualified financial institutions or financial analyst advising investors/traders not to buy or sell a particular stock. It is a no-action situation where long position traders are advised not to sell and others investors advised not to buy into the stock.
This refers to the upper-most price level that a particular stock or any other security reaches but doesn’t exceed due to dwindling number of buyers and an increasing number of sellers.
Is a branch of economics that’s concerned with the study of how the economy and different large-scale markets are structured, how they behave, and how they perform.
Relative Strength Index is a technical momentum indicator used in market analysis to determine if a stock is overbought or oversold by measuring the magnitude of a recent bullish or bearish price run. It has a scale of 0-100 where RSI readings of 70+ indicate a stock is overbought while an RSI reading below 30 is an indicator of an oversold security.
Moving Averages is a statistical calculation that is specially designed to identify the arithmetic mean of a given number of data sets or range of prices calculated over a given period of time. Each of these data set or price range is created by the average/mean price for that subset. For instance, a single data point on a moving averages scale may represent the average stock price for a day or trading session.
Bollinger Bands are a technical indicator tool characterized by two statistical carts that run alongside each other indicating the changes in prices and volatility of a financial instrument like stock or commodity over a given period of time.
Fibonacci retracements refer to two horizontal lines that use the Fibonacci numbers to measure the percentage of price retracement in a bid to indicate where the resistance and support are most likely to occur.
How much were Alibaba stocks originally?
During Alibaba's IPO in 2014, the company listed its stocks at $68 per share. At today's prices, Alibaba is worth just under $200. However, the company has since engaged in stock splits, so the real-term value is much more than this.
How much cash does Alibaba have?
Alibaba is reported to be sitting on just over $30 billion in cash reserves. It is expected to raise a further $11-$13 billion when it lists on the Hong Kong Stock Exchange.
Does Alibaba pay dividends?
In a similar nature to other multi-billion dollar tech stocks like Amazon and Netflix, Alibaba does not pay dividends. As such, you'll only be able to make gains through the company's share price.
Do I need to buy whole Alibaba shares?
Most online stock brokers now allow you to buy fractional shares. If they do, you can invest as little as you wish.
What stock exchange are Alibaba stocks listed on?
Alibaba is listed on the New York Stock Exchange, which is the largest stock exchange in the world.
Who owns Alibaba?
Alibaba is now a publically-listed company, meaning that it is owned by its shareholders. With that said, its founded Jack Ma is still a major shareholder.
What is the symbol for Alibaba stock on the NYSE?
Alibaba is listed on the NYSE under the ticker symbol 'BABA'.
Can I short Alibaba stock?
You can only short-sell Alibaba stocks if you use a CFD broker.
When was Alibaba founded?
Alibaba was founded in 1999. Its founder , Jack Ma, was able to launch the company by raising just $80,000.