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China's Alibaba has seen a continued plunge in its share prices (Reuters)

Shares in Chinese e-commerce giant Alibaba Group Holdings (NYSE:BABA) closed down more than 3% on 21 August near its initial public offering (IPO) price. Analysts are worried that the share price might fall even below the IPO price level.

The shares closed 3.04% down at $68.18, taking the stock to a new 52-week low, as the US stock markets witnessed their worst drop in more than a year. The company's IPO price was $68, and a continued slowdown in China where the firm generates most of its revenue, would take the share prices below that level.

In addition, the company faces a big lock-up period expiration in September when large investors, including Japan's SoftBank, and certain employees will be allowed to sell stock. The huge quantum of share sale is expected to negatively affect prices.

On 20 August, the share prices of Micro blogging platform Twitter fell below its 2013 IPO price.

Despite going public with the largest ever IPO on the New York Exchange at $25bn (£15.9bn, €22bn), Alibaba failed to meet the high expectations of investors. Earlier the e-commerce company posted its slowest revenue growth in more than three years.

The Chinese government's devaluation of the currency and suspension of lottery sales are denting the company's growth. In addition, the company's management continued to invest in a number of diverse ventures, significantly affecting its bottom line.

Analysts at Oppenheimer Holdings said the currency devaluation would have a 3% impact on fiscal 2016 revenue and 4% in 2017 with "minimal downside from imports".

Alibaba shares fell by more than 30% in 2015, amid negative sentiments about the company's growth potential.

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