Alibaba shares slide is reasonable: experts   

(ECNS) – Alibaba shares slipped for two days after an eye-popping surge of 38 percent on the first trading day. But experts say the decline is "within a reasonable range."

On Monday, Alibaba traded down 4.3 percent to close at $89.89. On Tuesday, the price further dropped to $86.62 at the lowest, and closed at $87.17.

The e-commerce giant completed a $2.5 billion IPO on Sept 19 by selling shares for $68 each.

"Considering the overwhelming market reaction on the first trading day, a slight decline is quite normal," said China-based Lianxun Securities director Cao Weidong.

Shan Ren, chief of the Chinese Association of the E-commerce Network Marketing Center, said he puts Alibaba's share price into the brackets of $75 and $85.

"Currently, investors are very enthusiastic about the company, floating high its share price. A price drop is quite rational as long as it's within that range," Shan said.

Experts say long-term trading depends on how Jack Ma, Alibaba's co-founder and chairman, spends the money he pocketed at the IPO.

"The US market is quite bullish in recent months, but its economic recovery is in the slow lane and may weigh on Alibaba's future trading," Cao said. "Alibaba's price hinges greatly upon the performance of the company."

Cao said investors are generally upbeat about Ma's vision and the company's growth.