Alibaba Falls as CNBC Reports Chanos Is Pitching Short Trade

(Closes today's trading in the second paragraph.)

(Bloomberg) -- Alibaba Group Holding Ltd. fell in New York trading after CNBC reported that Kynikos Associates LP founder Jim Chanos said investors should be bearish on the stock.

Chanos presented Alibaba as a short-sale trade at the Morgan Stanley Lyford conference on Friday, CNBC said, citing sources the news outlet didn’t identify. The sources said he mentioned “accounting concerns.” The shares plunged 5.4 percent before closing down 2.1 percent at $83.61, erasing an earlier gain of as much as 1.1 percent. He also recommended buying rival JD.com Inc. as a hedge on the bearish position, according to CNBC. The stock rose 3.1 percent to $29.70.

“Even though he’s been bearish on China for a long time, the market still takes him as a China specialist and listens to what he says,” Henry Guo, managing director at Summit Research Partners LLC, said of Chanos. Guo said the speculation about his short recommendation was moving the shares down.

Chanos didn’t respond to calls and e-mails seeking comment on the CNBC report.

Alibaba had soared 49 percent through Thursday since a record low in September. China’s biggest online shopping company reported second-quarter revenue last month that beat analysts’ estimates as it boosted advertising to fend off a slowing economy.

--With assistance from Taylor Hall and Joshua Fineman in New York.

To contact the reporter on this story: Bonnie Cao in New York at bcao4@bloomberg.net To contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net Richard Richtmyer