Walmart, the U.S. distribution ‘Dinong’ has sold its entire stake in China’s second-largest e-commerce company, Jingdong.COM.
According to Bloomberg News on the 21st, Walmart, the second-largest shareholder of Jingdong Dotcom, liquidated its eight-year investment and sold 5.19% of its stake and 144.5 million shares, raising a total of $3.6 billion (about 4.8 trillion won).
The sale price is around $24.95 per share, which is more than 11% lower than Jingdong’s closing price of $28.19 in the main trading session of the New York Stock Exchange on the same day.
The background of the sale is not known in detail, but it comes amid a growing possibility of slowing demand due to the crisis of the Chinese real estate market collapse and signs of abnormalities in the stock market.
Jingdong reported better-than-expected second-quarter profit on the back of its low-cost policy, but China’s retail market has been hit by a continued fall in consumer confidence. Rivals Alibaba and Pinduoduo are under pressure on their earnings as they wage an intense price war.
Walmart reportedly plans to focus on investing in Walmart China and its warehouse business, Sam’s Club, after selling its stake in Jingdong. Walmart reported a 17.7% year-over-year rise in second-quarter revenue for its China operations to $4.6 billion, helped by strong growth in Sam’s Club, a warehouse store, and digital services.
JULIE KIM
US ASIA JOURNAL
