Benzinga | Jan 3, 2022 09:12AM EST

Why Alibaba Shares Are Losing Steam?

* Alibaba Group Holding Ltd (NYSE:BABA) shares lost steam amid concerns of possible investor selloff after swapping their U.S. holdings for Hong Kong-listed ones, Bloomberg reports.

* The stock lost 3.3% after data indicated a sharp rise in the Alibaba American Depositary Receipts volume conversion into Hong Kong shares last week.

* Alibaba holdings under registration within Hong Kong's Central Clearing and Settlement System increased by ~724 million shares as per December 30 data.

* Related Content: Why Are Alibaba And Other Chinese Stocks Trading Lower Premarket?

* The move possibly insinuates that some players could reduce their stakes soon, UOB Kay Hian Hong Kong Ltd director Steven Leung said.

* In September, Alibaba holders converted ADRs into ~670 million Hong Kong shares in a day. The stock dropped ~13% over the following ten trading days.

* Alibaba is battling the double whammy of a domestic regulatory crackdown and U.S. crackdown on Chinese companies.

* Price Action: BABA shares traded lower by 0.24% at $118.50 in the premarket session on the last check Tuesday.