Alibaba: A good investment or a short term trade?

Yesterday in my post I wrote that:

"By analyzing BABA I found an interesting cycle with the S&P500 which suggests it’s a good time to buy Alibaba."

Today BABA jumped almost 6% which made it interesting for a quick day trade. Many people wonder if trading is the only thing Alibaba is good for, or if it is a real investment. When trying to answer such a question, I like to surf the web to read articles and comments, just to give me a hint of how the company is perceived. I could find many negative comments such as:

"Is this company a scam? Judge it yourself and not 'Analyst' of obvious intent to ask you to buy! Hongkong delisted BABA after they noted their mickey mouse structure. Taiwan found out BABA lied and tried to use a Singapore base to get into Taiwan and asking them to get out. Only the greedy US financial people accept this fraudulant company and ask you to 'BUY'. If you do not live in China or HK. Ask a friend there to tell you what kind of company is BABA and actually many others. These are fraud by China standard. They also sell products that kills people. Heard of the poisonous baby formula case?" - aspx

Whether that comment represents the truth or not, you can see that the perception of BABA is volatile. That volatility in the perception of BABA by people can be transmitted to its stock's price. In fact, the repercussion has already been felt since the IPO.

"A lot of what's happened over the last one to two months is that some of the optimism from the IPO has worn off," Sheridan told CNBC's "Squawk on the Street" on Wednesday. "We believe growth is still going to be good." - CNBC

I believe that BABA will rise in price in the following weeks, but the question for investors is "Will that company rise in value?"Applying a DCF model makes Alibaba look in good shape for a tech company, but growth in my opinion is not really interesting because it carry a great amount of stability risk. Basically, I think there's better places to invest your money.

As a trade however, I think there is enormous potential.