Alibaba stocks surge despite antitrust fine
Executives remain confident in the government's overall support of the company
Stocks impacted: Alibaba Group (BABA, 9988)
Shares in Alibaba surged over 15% in a knee-jerk reaction to the news that China slapped a record 18 billion yuan ($2.75 billion) fine on the company for abusing market dominance. The fine is equal to 4% of Alibaba's domestic sales. Aside from imposing the fine, the SAMR ordered Alibaba to make thorough rectifications to strengthen internal compliance and protect consumer rights. The rally in stocks was due to the fact that a key source of uncertainty for the e-commerce giant was removed, and on relief the fine was not as onerous as many feared. Besides, Alibaba executives said they remain confident in the government's overall support of the company. The firm said in a statement that it accepted the penalty and will fully comply. Alibaba shares were 7.71% higher at the close of trade on Monday.
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