It is seen as a wise approach if we keep an eye on the sayings of executives of a public company right before the company is about to announce the financial results of the quarter.
Despite the fact that there is a limit by securities rules on how much they are possibly allowed to share, there have been clues for the people who wish to invest.
For instance, there had been news surfacing regarding Twitter that it ended stock sales that are regular by executives; this was a move that was interpreted as a gesture that is pertaining to confidence-building aiming at Wall Street.
This week, yellow flag was sent to the investors by the CEO and founder of Alibaba Group Holding, Jack Ma. Latest Alibaba news is that Ma instituted a hiring halt at the China based e-commerce giant. The news had been coming from the meeting’s transcript in which, as per the reports, Ma warned that the Chinese company has grown a way too quickly.
Alibaba news reports that the news is somewhat true if we see the available public numbers, as far as the bottom line perspective is concerned. As of December 31, the number of employees that the company had was 34,081. It is 63 percent more than what the total number of employees the company had a year before, which is 20,884.
This surging headcount has helped the fiscal third quarter costs of Alibaba, up 69 percent that is faster than the revenue growth which is of 40 percent.
This has resulted in the shrinkage of operating margin of the company from 47 percent to 36 percent. The net income of the company has also been fallen in a huge way, the dropping of 28 percent from early year to $5.9 billion. In the coming week, the Chinese e-commerce giant is expected to unveil the results of fourth quarter.
The analysts at Wall Street have been observing the sales to increase up to 44 percent which is to $2.78 billion. Since January 28, shares of Alibaba have fallen 16 percent that is just the day before the e-commerce giant unveiled the numbers for its quarter that ended in December.
The cautious approach is being taken by the investors who had sold the stock related to Alibaba only on the basis of reports, resulting in pushed down shares 3 percent on Wednesday, earlier this week.
Anyone who knows whether the costs pertaining to Alibaba has grown way too fast for its quarter that ended in March, it would only be the CEO. The halt in hiring is seen as an unusual move for a company that is as fast growing as this e-commerce giant. However there might be a sense of worry in the top management regarding the bottom line’s health.
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