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Alibaba shares slide amid SEC investigation

Alibaba's stock fell nearly 7 percent Wednesday after the China-based e-commerce firm said the Securities Exchange Commission was looking into its accounting practices.

The company has provided the SEC with information about its accounting for logistics unit Cainiao Network as well as operating data from its Singles' Day shopping festival, according to Alibaba's annual report filed on Tuesday.

"The financial disclosure we are providing to investors relating to Cainiao Network in our 20-F on pages 122-123 (revenues, net loss and balance sheet items) is exactly the kind of robust and transparent information that will address the underlying issues in SEC's inquiry," a company spokesperson said in a statement.

Gil Luria, a technology analyst at Wedbush Securities, said investors need to think carefully about what they want to do with the stock.

"I think it's a really tough one. The flipside of what we're talking about is this is a company that just grew 40 percent and is only trading at 20 times [earnings]," he told CNBC's "Power Lunch." Then again, "there's they underlying concerns with China, there's concerns about inflated volumes, there's concerns about the competitive situations vis-à-vis JD.com" in addition to the SEC's investigation.

Alibaba shares have risen more than 13 percent over the past three months, yet are still down about 7 percent year to date.

BABA in 2016Source: FactSet

— Reuters contributed to this report.