NEW YORK (TheStreet) -- Shares of Alibaba (BABA) - Get Report are plunging by 7.7% to $74.87 on heavy trading volume late Wednesday afternoon, after the company disclosed that the SEC is investigating whether its accounting practices violated federal laws.
The Chinese e-commerce giant said it's providing documents and cooperating with the probe into its consolidation practices, related party transactions and reported Singles' Day data.
Singles' Day is Alibaba's biggest shopping day, generating more than 90 billion yuan, or $13.7 billion, in sales on its platforms last year, according to Bloomberg.
Alibaba self-reports gross merchandise volume for Singles' Day, and analysts argue that the numbers could be overstated because the country includes transactions that have been placed but not completed, such as returns, the Wall Street Journal adds.
About 40.09 million shares of Alibaba have been traded so far today, well above the company's average trading volume of roughly 11.36 million shares per day.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C-.
Alibaba's strengths such as its notable return on equity, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
You can view the full analysis from the report here: BABA
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.