Two weeks ago, Alibaba (NYSE:BABA) shares opened at $104.4 with much forethought for hiked earnings that week later. The least expected happened when the company realised a drop of 20% in its stock on Friday. The stock fell to $85.7, which was barely above the company’s all-time low of $82.81. This poor performance begun at the time when Alibaba Group Holding (NYSE:BABA) released its quarterly results after the Chinese regulators forbid the company.

Criticising the company’s management for sluggish movement of dealing with its weaknesses in the market, especially fake commodities, Chinese State Administration for Industry and Commerce (SAIC) issued a white paper. Thereafter, the company realised a fall of 4% in its average stock. TaoBao has recently faked much of Alibaba Group Holding’s (NYSE:BABA) commodities. The White Paper contained the above allegations.

It stated that the company is not serious about solving problems related to its sales, especially the internet transaction platforms. Thereafter, the company reported a net income of $2.1 million or a price per share of 81 cents in the three months (October to December). These results were not expected related to the consensus estimate of 75 cents. The company also archived a 49% year-over-year with the gross merchandise value growth in the same quarter.

The company missed out revenue estimates despite reporting favourable earnings. Though the street was expecting a top-line of $4.44 billion, Alibaba Group Holding (NYSE:BABA) only managed $4.22 billion in that quarter. As a result, for the first time in three months, the company’s stock dropped by 9% below the $90. However, the White paper report and the decline in share price have caused more damage to the company.

First, the company has experienced a number of price target diminutions and has received fewer amounts for its stock from Goldman Sachs Group Inc. (NYSE:GS) of $111 from $121. Also, Alibaba Group Holding Ltd. (NYSE:BABA) shares have received low ratings from analysts working at Stifel with the excuse that the SAIC White Paper is dangerous in the market. Many analysts suggest that the company’s stock will go further down.

For example, Arete Researchers believe that Alibaba (NYSE:BABA) stock will diminish to 72% from 75%. The cause remaining unknown, Alibaba’s (NYSE:BABA) shares diminished by 4% in the last week though analysts suggest that it was due to structural pressures and competition from its rival Tencent Holdings Ltd. (OTCMKTS:TCHEHY). Besides, an American law firm has filed a petition that the company misled the public with its IPO on September 2014 because of the SAIC White paper.

The law firm protests that Alibaba (NYSE:BABA) has assumed substantial scrutiny on its products in the market and, as a result, mislead its customers. The street is now looking down upon Alibaba (NYSE:BABA), and out of 42 analysts, 34 have rated a buy on the company’s stock while only three guarantees a sell. The consensus target price has been at $110 mark despite the company’s reduced earnings recently.