Alibaba Pictures's stock dipped 3.5 percent in Hong Kong on Tuesday as the company warned of potential losses amounting to 950 million to $1 billion yuan ($140 million), Forbes reported.
The entertainment wing of Alibaba Group announced on Sunday that it projects a massive loss for the financial year ending Dec. 31. The company also recorded a loss of $466 million yuan for the first six months of 2016, Forbes wrote.
The anticipated loss is blamed on the marketing expenses of Tao Piao Piao, the company's online ticketing platform. This segment scooped up 1.7 billion yuan in investments last year, according to Forbes.
In a release, Alibaba Pictures said that Tao Piao Piao "continued to utilize its financial resources to implement its marketing strategies in order to grow its business, and has further enhanced its user experience and strengthened its market position by the end of 2016."
Since its establishment in 2014, Alibaba Pictures has invested in several Paramount films such as "Star Trek Beyond," "Teenage Mutant Ninja Turtles: Out of the Shadows" and "Mission: Impossible - Rogue Nation."
One of the group's notable ventures is its minority stake in Amblin Entertainment, Steven Spielberg's film and television production company.
It has also poured money into Youku, the counterpart of YoutTube in China, although there are speculations that this is a loss-making machine as well.
In December, Alibaba Pictures released its first film, "See You Tomorrow," which was produced by Wong Kar Wai and starred Angelababy and Tony Leung. The romantic comedy film scooped up $70 million in China, per The Hollywood Reporter.
Alibaba's push into the film industry has been inspired by China's position as the second-largest entertainment market. The Jack Ma-led company announced late last year that it was looking to invest 50 billion yuan ($7.2 billion) in content over the next three years, CNBC reported.