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Alibaba Tracker: Entertainment Value

Alibaba stock (BABA) continues to ride the wave kicked off by the company’s strong Q3 results and Olympic sponsorship news in the end of January. Since peaking, BABA had surfed that 100+ peak, fluctuating between $100 and $105.

The third week of March saw a minor break from that trend as prices jumped up to $108.47, near the Chinese eCommerce marketplace’s 12-month high over $109 seen last September. At the time of writing, things were nearly back to the usual, although still a bit up with BABA trading at $105.58, up 0.47 percent from Tuesday’s (March 21) close.

As BABA rides on, analysts anticipate some value growth for the eCommerce giant’s shares. Median 12-month projections place BABA up 18.4 percent. While some peg the company rising to $150 in the same period, no one appears to anticipate that BABA will be heading down below $100 anytime soon.

Alibaba has, for the most part, continued to uphold Jack Ma’s assertion that 2017 would be a year of investments and partnerships over acquisitions. Last week, for one, saw the company lead an $18 million Series B round for smart car tech startup WayRay to build out its AR technologies for the automotive industry.

But the largest moves in recent weeks signal that the push to reach entertainment media dominance in China is gaining momentum, especially when it comes to the production of original film, television and streaming content.

Recently, the company fully acquired Chinese online ticketing platform Damai for an undisclosed sum, said Reuters. Alibaba first invested in Damai back in 2014; now, Damai’s ticketing platform will reportedly form a strategic part of the entertainment value chain.

“Damai.cn will be a powerful platform to distribute our media content as well as expand our user reach and engagement,” Alibaba told Reuters, noting there would be synergies with the company’s entertainment units Alibaba Music, Alibaba Pictures and Youku, the “YouTube of China” that Alibaba acquired for $3.7 billion back in 2015.

The Damai acquisition is just the latest in a string of entertainment industry investments. In October of last year, said Bloomberg, Alibaba devoted a fund of over than 10 billion yuan ($1.48 billion) for new projects in media and entertainment.

Past investments already look to be paying off. In its latest earnings figures released back in January, Alibaba reported that its digital media and entertainment sector saw 273 percent growth year over year upon the consolidation of Youku Tudou.

Earlier this month, Alibaba partnered up with the Qingdao arm of Haier Group, China’s largest home appliance supplier. The two cooperated to launch new products and cater to appliance and smart home market demands — including smart TVs.

Last week, Alibaba’s film studio subsidiary Alibaba Pictures Group signed a three-year contract with the parent company to develop original content for film and television. Additionally, Alibaba looks to capitalize on China’s own cord-cutting trend by having Youku, Alibaba Literature and Alibaba Pictures develop online movies and other streaming content.

What this adds up to is simple, but big. Alibaba is gunning for media supremacy in China everywhere that viewers could possibly view.

Not just in cinemas or on television or digital streaming services — but all of the above. Alibaba now has its arms in the hardware for viewing, the content displayed, and the online ticketing services and software. Alibaba distributes tickets via Taobao, Tmall and Wechat and has cinema ticketing system software subsidiary Yueke.

But this is neither the climax nor the denouement in the company’s entertainment plays. Alibaba still has a few more tricks up its sleeve, including a recent investment in another multibillion-dollar industry: mobile gaming.

Alibaba recently announced plans to invest 1 billion yuan ($145 million) to ally with other mobile gaming firms — including Mail.Ru Group, TFJoy, Efun and ONEMT, said CNBC — on distributing games developed in China on the international market.

China’s online gaming market is the largest in the world, according to PricewaterhouseCoopers, projected to hit $12 billion by 2020.

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