Alibaba stock has jumped about 30.3% in the last three months despite being censured by popular short-seller Jim Chanos. Now the e-commerce giant’s executive vice chairman delivered a reality check to stock bears, according to Income Investors.

Alibaba
alibaba by sam_churchill, Flickr

Alibaba sends message to stock bears

At the Delivering Alpha Conference on Tuesday, Joseph Tsai, referring to the bears, said, “You’ve got to pay a lot of respect to [Jim Chanos] to withstand that kind of pain,” for shorting the stock.

Tsai said the problem is that Chanos does not seem to try to understand the business and power of the digital economy in China. Tsai added that he would like to invite Chanos to see their campus so he can explain their business to him. It must be noted that Chanos criticized Alibaba’s business once again earlier that day, says Income Investors.

Chanos said, “It’s the Chinese model; you never see anything.”

He added that one can see the cash going out the door and not coming in the door, which is concerning. He also explained that there is not enough disclosures to tell investors what is happening in this vast network. Chanos was referring to Alibaba’s distribution arm.

Answering those accusations, Tsai said Alibaba does not consolidate its logistics arm just because of its size. To consolidate that business, the Chinese firm would have to manage a distribution force of nearly 2 million people, the executive said. Tsai said their platforms generate 40 million packages daily, while Amazon manages around 5 million to 6 million packages a day.  Also he noted that Alibaba’s stock has surged more than 50% since Chanos started talking about Alibaba.

One concern still remains

Since Alibaba reported earnings on August 10, its stock price has been racing northwards. The online retailer posted 59% year-on-year revenue growth amid worries about China’s economy. The e-commerce giant has beaten analyst estimates on both earnings and revenue. Since the earnings report, Alibaba’s stock has gained more than 15% and hit a 52-week high of $104.3 on September 6.

Despite the recent rally, there is one concern that could pull the stock down. The China-based e-commerce company has been accused of not doing enough to fight the threat of fake products on its site. After the company had revealed that the SEC released an investigation into its accounting practices, the stock took a hit.