U.S. equity markets kicked off the week with a cautious tone Monday as futures trended downward while investors braced for several critical events in the coming sessions.
Technology shares bore the brunt of selling pressure, with market participants positioning ahead of Nvidia’s highly anticipated quarterly earnings scheduled for Wednesday’s after-hours session.
Alibaba experienced significant selling pressure after the Chinese technology giant unveiled plans for a $10.4 billion share placement designed to finance its artificial intelligence expansion strategy.
Alibaba Group Holding Limited, BABA
The equity offering, targeted at international investors excluding U.S. participants, was priced at HK$112.70 per share. This represented a meaningful markdown from Friday’s closing level of HK$123.
Shares in Hong Kong plunged 8.5% during Monday’s session, while U.S.-listed American depositary receipts declined approximately 2%.
Notable investor Michael Burry intensified the negative sentiment by revealing he had completely divested his Alibaba holdings, redeploying capital into competitor JD.com instead.
Burry articulated his opposition to the dilutive share offering and projected continued deterioration in Alibaba’s return on invested capital as AI expenditures accelerate. He indicated he would only reassess the investment opportunity following a roughly 50% price decline from current levels.
Memory chip manufacturers also faced headwinds. Micron and Western Digital retreated, alongside semiconductor peers including Intel and Marvell Technology.
Applied Optoelectronics collapsed 13% following its announcement of a potential $600 million at-the-market common stock offering program, triggering shareholder dilution anxiety.
XPeng delivered second-quarter financial results that fell short across key metrics. The electric vehicle manufacturer generated $2.91 billion in revenue alongside a non-GAAP loss of $0.19 per share, both trailing Wall Street consensus. Vehicle deliveries stagnated year-over-year at 103,295 units.
Steel Dynamics surged approximately 6% Monday following the weekend collapse of trade discussions between Washington and Ottawa.
Nucor similarly advanced more than 3%. Both securities had retreated last week amid speculation that an agreement might reduce tariff barriers on Canadian steel and aluminum exports.
The negotiation breakdown eliminated this overhang, propelling steel equities higher as the new trading week commenced.
Samsung Electronics plummeted 9% in Seoul trading after unveiling plans for stock repurchases totaling up to $79 billion. The initiative underwhelmed investors who had anticipated more substantial capital returns from the global memory chip leader.
Alvotech stood among the session’s few gainers, climbing 3% following Bank of America’s initiation of coverage with a Buy recommendation and $7 price objective.
The broader market maintains its attention on Nvidia’s Wednesday earnings release, which analysts expect will significantly influence technology sector sentiment throughout the remainder of the week.
The post Market Movers: Alibaba (BABA) Plunges on Share Offering While Steel Stocks Rally Monday appeared first on Blockonomi.
