PDD - Pinduoduo Inc.

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
+1.14 (+4.78%)
At close: 4:00PM EDT
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Previous Close23.87
Bid25.03 x 1000
Ask25.05 x 27000
Day's Range24.18 - 25.10
52 Week Range16.53 - 31.99
Avg. Volume5,876,853
Market Cap29.071B
Beta (3Y Monthly)N/A
PE Ratio (TTM)N/A
EPS (TTM)-2.09
Earnings DateAug 21, 2019
Forward Dividend & YieldN/A (N/A)
Ex-Dividend DateN/A
1y Target Est28.22
Trade prices are not sourced from all markets
  • What Downturn? Alibaba Reports Steady Results Amid Global Tumult

    What Downturn? Alibaba Reports Steady Results Amid Global Tumult

    (Bloomberg) -- Forget the world’s chaos for a moment. Alibaba Group Holding Ltd. is doing just fine.Despite a trade war, the slowing domestic economy and brutally aggressive competition, China’s largest technology company reported revenue and profit numbers that handily beat analyst estimates. Revenue rose a blazing 42%, while net income more than doubled. Shares popped 3% in U.S. trading.Insulated because of its predominantly domestic business, Alibaba is benefiting from a demographic shift to internet shopping. Chinese online sales accelerated in the June quarter, helped by sales promotions that unfolded across the country’s largest e-commerce platforms. Alibaba’s report dropped just as the risks of a recession spike, U.S.-China trade tensions ratchet up yet again and archrival Tencent Holdings Ltd. warns of a tough economic outlook.“It’s surprising how resilient Alibaba is,” said Michael Norris, a Shanghai-based research and strategy analyst at consultancy AgencyChina. “There’s a big disconnect between Wall Street, which has really given a beating to Alibaba’s shares, and people on the ground.”Revenue rose 42% to 114.9 billion yuan ($16.3 billion) in the three months ended June, while net income also came in ahead of expectations at 24.4 billion yuan. That was helped by more than 4.3 billion yuan of pretax profit from Ant Financial, the payments-to-lending affiliate controlled by billionaire Jack Ma.“Despite the macro environment not being as good as last year, Alibaba has launched a lot of new initiatives and the personalized product feed is helping maintain its growth rate,” said Steven Zhu, an analyst with Pacific Epoch. “Its live-streaming services and collaboration with international brands are helping.”The economic slowdown is eroding parts of the company’s sprawling empire of e-commerce, retail stores, delivery services and more. Revenue in its digital media and entertainment segment inched up just 6%, despite streaming service Youku enlarging its average daily subscribers by 40%. Growth in its cloud computing division, which commands half the country’s market share, slowed to a still-respectable 66%.Small and mid-sized enterprises may be leery of spending on ads -- Alibaba’s biggest source of income -- given the current environment. That prompted Chief Financial Officer Maggie Wu to tell analysts Alibaba is in no rush to monetize its new shopping recommendation feeds.Longer term, investors have raised flags about the impact on margins of Alibaba’s enormous spending on so-called new retail -- its effort to use technology to overhaul physical retailers -- and deepen its footprint in lower-tier cities and rural areas. Alibaba said it will continue to invest in those initiatives, as well as on-demand services like food delivery unit Ele.me, which is fighting a fierce, money-losing battle with giant Meituan.Alibaba is approaching a critical juncture just as Chief Executive Officer Daniel Zhang prepares to replace billionaire co-founder Ma as chairman in September. A U.S. campaign of tariffs and other curbs is heightening uncertainty around the world’s second-largest economy, while the emergence of rivals at home such as Pinduoduo Inc. tests its longstanding dominance of Chinese online retail.The e-commerce titan may be on the look-out for assets to bolster its lead. Alibaba is in talks to pay $2 billion for NetEase Inc.’s Kaola, which specializes in selling foreign goods to Chinese consumers, local media outlet Caixin reported.The company is also hatching plans to raise more capital. Alibaba’s quarterly performance bolsters its ambition of pulling off what could be Hong Kong’s biggest share sale since 2010. The company is said to have already filed confidentially for a stock listing, but it’s unclear when it might go ahead with the float given the widespread protests that have gripped Hong Kong over the past 11 weeks. Executives made no mention of the issue during their conference call.Overall, adjusted earnings per share came to 12.55 yuan versus the 10.3 yuan projected. Net cash slipped 4% in the quarter, depressed by a $250 million cash settlement reached last quarter on a U.S. federal class action lawsuit.The “key standout for us is that Alibaba’s China commerce business grew 40%, close to twice the rate of the China online retail industry,” said Neil Campling at Mirabaud Securities. “The scale benefits are paying off and Alibaba is enjoying both active consumer growth momentum and higher average spend.”\--With assistance from Zheping Huang and Sheryl Tian Tong Lee.To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Edwin Chan, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • GlobeNewswire

    FingerMotion Provides Supplemental Corporate Update

    FingerMotion, Inc. (OTC QB: FNGR), a US FinTech company with mobile payment and recharge platform operations in China, today provided a supplemental corporate update in a letter from its CEO Martin Shen to its shareholders. The China Unicom (CHU) deal was an extremely positive step for our company. The partnership agreement between FingerMotion and China Unicom allows FingerMotion to have direct access to users for their top-up fulfillment, and also allows FingerMotion to sell any and all mobile phone products available from China Unicom through the China Unicom brand portals.  China Unicom will remain responsible for all inventory and fulfilment costs of physical products, meaning FingerMotion will have very limited capital costs in handing all revenues coming through the portals.

  • Barrons.com

    3 Stocks for a China First Investment Strategy

    IQivi, Weibo, and Pinduoduo offer investors a way to monetize themes and products that have broad societal appeal

  • GlobeNewswire

    Pinduoduo to Report Second Quarter 2019 Unaudited Financial Results on Aug 21, 2019

    SHANGHAI, China, Aug. 06, 2019 -- Pinduoduo Inc. ("Pinduoduo") (NASDAQ: PDD), an innovative and fast growing “new e-commerce” platform and one of the leading Chinese e-commerce.

  • Why 1 Analyst Likes Alibaba and YY
    Motley Fool

    Why 1 Analyst Likes Alibaba and YY

    Jefferies goes all-in on Chinese stocks -- and one of them might even be worth buying.

  • 3 Retail Stocks Likely to Stand Tall This Earnings Season

    3 Retail Stocks Likely to Stand Tall This Earnings Season

    Retailers are making prudent investments to strengthen digital ecosystem and bolster shipping and delivery capabilities. While these drive sales, they entail high costs. Margins remain one of the key areas to watch.

  • GlobeNewswire

    FingerMotion Provides Corporate Update

    FingerMotion, Inc. (OTC QB: FNGR), a US fintech company with mobile payment and recharge platform operations in China, today provided a corporate update in a letter from its CEO Martin Shen to its shareholders.

  • Where Will JD.com Be in 10 Years?
    Motley Fool

    Where Will JD.com Be in 10 Years?

    China’s top direct retailer faces tough challenges -- but smart investments, big backers, and a growing market should lift its stock higher over the next decade.

  • GlobeNewswire

    Pinduoduo Announces Board of Director Changes to Comply with NASDAQ Requirements for Majority Independent Board

    The Board of Directors of Pinduoduo Inc. (“Pinduoduo”, or the “Company”) (PDD) announced changes today to comply with NASDAQ requirements for a majority independent board. “Pinduoduo is committed to becoming the gold standard in corporate governance as a publicly listed company. Effective immediately on the first anniversary of Pinduoduo’s listing, Mr. Zhen Zhang will cease to be a Director as the Company complies with NASDAQ requirements for a majority independent board within one year after its initial public offering.

  • Benzinga

    Najarian Brothers See Unusual Options Activity In Pinduoduo And Sirius XM

    On CNBC's "Fast Money Halftime Report," Jon Najarian spoke about unusually high options activity in Pinduoduo Inc (NASDAQ: PDD). Pete Najarian said options traders were also buying the at the money calls in Sirius XM Holdings Inc (NASDAQ: SIRI). Pete Najarian loves the risk-reward ahead of the earnings report.

  • How Alibaba Is Winning the Trade War

    How Alibaba Is Winning the Trade War

    As the Chinese internet giant gears up for its quarterly earnings, bulls expect various tailwinds to support strong results.

  • Just How Far Ahead Is Alibaba in China’s e-Commerce Market?
    Market Realist

    Just How Far Ahead Is Alibaba in China’s e-Commerce Market?

    Alibaba (BABA) is known as the leading e-commerce company in China, but just how far ahead is it?

  • Barrons.com

    Alibaba Stock Will Benefit from Strong Consumer Spending in China

    Chinese consumers aren’t cutting back on online spending, and that could indicate a strong second half of the year for e-commerce companies, KeyBanc Capital Markets analyst Hans Chung says.

  • Is Pinduoduo Inc. (NASDAQ:PDD) As Strong As Its Balance Sheet Indicates?
    Simply Wall St.

    Is Pinduoduo Inc. (NASDAQ:PDD) As Strong As Its Balance Sheet Indicates?

    Investors looking for stocks with high market liquidity and zero debt on the balance sheet should consider Pinduoduo...

  • JD Stock Has to Clear the Hurdles Facing Chinese Tech

    JD Stock Has to Clear the Hurdles Facing Chinese Tech

    Beyond the size of the market, JD.com's (NASDAQ:JD) market share may be at risk. The company long has been a distant number two to Alibaba (NYSE:BABA). That said, evidence sprouted that JD.com was taking share, as Luce Emerson wrote back in 2017. However, that no longer appears to be the case, fading one of the declining reasons to buy JD stock.Source: Shutterstock Still, Alibaba is expected to lose market share again. But that share isn't going to JD.com. Rather, smaller rivals like Pinduoduo (NASDAQ:PDD) have stepped in. Additionally, other companies taking advantage of Tencent Holdings (OTCMKTS:TCEHY) app WeChat took market share for themselves.As we've seen in the U.S., technology allows smaller operators to compete head-to-head with massively larger firms. That's likely going to be the case in China as well. Therefore, JD.com stock faces risks as the underlying competition defends its existing turf.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Rising Costs Hurts JD.com StockThe other concern is below the operating line. Part of the reason JD stock has rallied is because margins have expanded, notably in the first quarter. Years of investments have deflated profit, but that's starting to change. With JD heading to real profitability -- analysts expect over $1 in adjusted EPS in 2020 -- investor confidence has risen. * 7 A-Rated Stocks to Buy for the Rest of 2019 The question is whether that can hold. Some signs suggest that it might not. Management said in February that it would add 15,000 employees this year. Those plans appear to have changed.Multiple sources reported in April that the company was cutting 8% of its workforce. Soon afterwards, CEO Richard Liu wrote an internal letter citing huge losses in the company's logistics unit as the rationale for cutting the pay of delivery couriers. Liu elsewhere complained about "slackers" in his business, a complaint that drew scrutiny in the Chinese media. It also sparked discussions on social media amid debates over work-life balance in Chinese tech.To be sure, layoffs aren't necessarily bad news. And they don't mean that JD.com or JD Logistics are headed for declining earnings. JD.com hasn't just reduced its staff and delivery courier pay; it cut 10% of its executive workforce in February. Management explained this as a move to speed decision-making. Some pruning after growth makes sense.But the pressure on the logistics business is worrisome. Logistics is the bread-and-butter of Alibaba, JD.com's key competitor. Margins overall for JD.com are quite low: there's no room for pressure if the company must reverse its pay decision or cut the hours of staff elsewhere. It's not difficult to get the sense that JD.com is pushing its employees as hard as it can. And with adjusted operating margins under 2%, it has little recourse if they push back. The Case for JD StockAgain, this is not to say that JD stock is headed for a flameout. This still is the number-two e-commerce play in a still-growing market at a valuation that looks reasonable.But back above $30, the case does get a bit thinner. Plus, execution becomes more important. Below $20 late last year, JD.com stock was simply too cheap, priced for all but a worst-case scenario.But with the JD stock price more than 50% higher, that's not the case.And there are challenges to watch here. The Chinese economy still may not be that healthy. JD Logistics needs to get better; as Liu himself pointed out, the business only has two years' worth of cash left. Smaller competitors are coming. JD.com has a large enough, and profitable enough, business to thrive in this new environment. Unfortunately, the room for error is not what it used to be.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 A-Rated Stocks to Buy for the Rest of 2019 * 7 Education Stocks to Buy for the Future of Academia * 5 Stocks to Buy as You Rebalance Your Portfolio The post JD Stock Has to Clear the Hurdles Facing Chinese Tech appeared first on InvestorPlace.

  • China's Venture Capital Boom Shows Signs of Turning Into a Bust

    China's Venture Capital Boom Shows Signs of Turning Into a Bust

    (Bloomberg) -- China went through a five-year surge in venture capital investment that fostered a new generation of startups from ride-hailing giant Didi Chuxing to TikTok-parent Bytedance Ltd. Now the boom may be over.Venture deals in China plummeted in the second quarter as investors pulled back amid unpredictable trade talks and growing concerns about startup valuations. The value of investments in the country tumbled 77% to $9.4 billion in the second quarter from a year earlier, while the number of deals roughly halved to 692, according to the market research firm Preqin.The second quarter of 2018 marked the peak for China venture deals with a total of $41.3 billion invested. That included a $14 billion round for digital payments giant Ant Financial, $3 billion for e-commerce upstart Pinduoduo Inc. and $1.9 billion for truck-sharing service Manbang Group (known also as Full Truck Alliance Group). By comparison, the largest venture deal in the second quarter of 2019 was a $1 billion investment in JD Health, the health care affiliate of e-commerce provider JD.com Inc.China has never been through a widespread bust like the U.S. did after the dotcom boom, in part because the country’s venture market is so new. Years of steady growth in tech investments resulted in predictable -- and enormous -- profits. Whether the current downturn becomes a painful crash depends in large part on how VCs, entrepreneurs and regulators navigate terrain they’ve never seen before.“We’re seeing real stress in the system for the first time,” said Gary Rieschel, a founding partner at Qiming Venture Partners who has worked in China and the U.S. “We have never seen a downturn in the China market. For 20 years, it’s been pretty much up and to the right.”China’s venture boom began in 2014 when Alibaba Group Holding Ltd. went public in the largest-ever initial public offering, making clear to investors the potential riches in the world’s most populous country. Venture deals tripled that year to more than $17 billion and proceeded to rise every year through 2018 when the total topped $105 billion, almost as much as in the U.S.Along the way, firms like Qiming, Sequoia China, Tiger Global Management and SoftBank Group Corp. fostered some of the most valuable startups in the world. Bytedance, the force behind short-video app TikTok and other addictive services, sports a valuation of $75 billion, the highest anywhere according to CB Insights. Didi, the ride-hailing service that ousted Uber Technologies Inc. from China, was last valued at $56 billion, the second highest.But the rise of China’s tech industry put it squarely in the crossfire of the trade war. The Trump administration has accused China of stealing intellectual property and unfairly subsidizing companies in strategic fields, including semiconductors, artificial intelligence and autonomous driving. In May, the U.S. blacklisted Huawei Technologies Co., preventing the telecom giant from buying American components, and is considering doing the same to a swath of startups.The trade war gives investors one more reason for caution. Valuations had already grown vertiginous. High-profile startups such as smartphone-maker Xiaomi Corp. and delivery giant Meituan Dianping saw their stocks tumble after they went public, reinforcing the impression that private-market valuations had gotten out of hand.So-called sharing economy startups have also tested the patience of their investors. Companies like Didi, Meituan and bike-sharing provider Ofo blitzed the market with heavy subsidies to grab market share from rivals, making up for their losses with venture money. Now there’s skepticism that many such companies will ever turn a profit.“You’re really reaching the end of the shared economy -- this idea of let’s give away services for free and make up for it in volume,” Rieschel said. “Some companies -- Didi is the classic case -- are just not showing any ability to become profitable.”A Didi representative didn’t respond to a message and email seeking comment.Valuations haven’t declined yet in China though. The country’s startups have resisted so-called down rounds, when they raise money at lower valuations than an earlier round. “China entrepreneurs, more than any on the planet, will do unnatural things to avoid a down round,” Rieschel said.Meanwhile, venture firms are pivoting to alternative business models, like enterprise software. Such startups are not only less capital intensive, they are at a stage of development where they require less money.This also may simply be a time when venture investors opt for caution. Given the volatile negotiations between Donald Trump and Xi Jinping, it’s not clear what kind of opportunities China’s tech startups will face in the years ahead or how capital markets will treat the next big IPO filing.“It won’t cost you that much to sit on your hands for a few months,” Rieschel said.\--With assistance from Lulu Yilun Chen.To contact the reporter on this story: Peter Elstrom in Tokyo at pelstrom@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Edwin Chan, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Nope, Pinduoduo Isn't a Bigger E-Commerce Player Than JD.com
    Motley Fool

    Nope, Pinduoduo Isn't a Bigger E-Commerce Player Than JD.com

    The Chinese e-commerce newcomer has more shoppers than JD, but it’s making a lot less money.

  • Pinduoduo cements position as China's second-largest ecommerce player

    Pinduoduo cements position as China's second-largest ecommerce player

    Alibaba and JD.com have been in a war over the Chinese e-commerce space for a decade or so, but a third player called Pinduoduo has managed to shake up the duopoly in recent times. According to data provider QuestMobile, Pinduoduo's daily active users have outnumbered JD's for at least the past 12 months, and it came out of the mid-year sales festival -- first popularized by JD as a counterpart to archrival Alibaba's "11/11" shopping day -- with 135 million DAUs. JD, in comparison, ended with 88 million DAUs and Alibaba's Taobao retained its top spot at 299 million.

  • Bloomberg

    Alibaba Aims to Double Global Brands With New English Site

    (Bloomberg) -- Alibaba Group Holding Ltd. has set up a new website to double the number of global brands on its flagship online mall, taking an important step toward fulfilling its global ambitions.The e-commerce giant began offering an English-language portal on Tmall for the first time on Wednesday to entice more merchants from around the world to sell to Chinese consumers. Alibaba is counting on the initiative to help double the number of foreign brands on Tmall Global to 40,000 in three years, said Yi Qian, deputy general manager of the service, which caters to buyers of foreign goods.Alibaba is seeking new growth engines to offset a cooling economy at home as the trade war rages on, while fending off increasingly aggressive competitors including JD.com Inc. and Pinduoduo Inc. Billionaire co-founder Jack Ma had set a goal of generating more than half of the company’s revenue from outside of China by 2025.“The website will widen our reach to merchants, especially to those medium and small sized businesses around the world,” Yi said in an interview. “We will help them with our logistics and marketing services.”Alibaba grew to become China’s largest public company by popularizing e-commerce across the world’s No. 2 economy, on which it still depends for the vast majority of its business. It’s begun making inroads into Southeast Asia through the acquisition of Lazada, but now aims to broaden its reach even further.Tmall’s new portal allows English-speaking merchants to fill in details online about their products. Alibaba then vets them based on category and quality, and will contact merchants within 72 hours to gauge if their products are a fit, Yi said. Previously, such sellers could only join Tmall through personal introduction, or by signing up at trade fairs. Other foreign-language versions of the website are in the works, including Spanish, Japanese and Korean.Alibaba doesn’t disclose dealings over its Tmall platform, which helps merchants sell goods to 600 million-plus buyers, but it’s one of the single largest online retailers in China’s $1 trillion e-commerce arena. Jiang Fan, one of Jack Ma’s closest lieutenants, said in April the company wanted to double transaction volumes on its Tmall service in three years.To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.netTo contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Should JD.com Stock Holders Be Worried About Employee Exodus?

    Should JD.com Stock Holders Be Worried About Employee Exodus?

    It's been almost a year since JD.com (NASDAQ:JD) CEO and founder Richard Liu was arrested on suspicion of rape. Since then, JD stock has lost about 10% of its value. Of course, it could have been much worse. Source: Daniel Cukier via FlickrInvestorPlace - Stock Market News, Stock Advice & Trading TipsLiu was not convicted , and even though the university student who made the allegations is suing JD.com's CEO for undisclosed damages, investors seem to have forgiven the e-commerce company. JD stock is up 35% year-to-date through June 18, recovering most of the losses from the fall and early winter. One thing that has cropped up in recent months that could affect JD.com though is the departure of several key executives. In May, Lan Ye, a key driver of the company's growth, stepped down. In June, chief technology officer Zhang Chen, who was responsible for the company's unmanned logistics operations among other projects, left the company. Also going is general counsel Lu Yong. * 7 Top-Rated Biotech Stocks to Invest In Today Not only are top-level executives leaving, but so, too, are mid-level managers, a sign that Liu's management style might be rubbing employees the wrong way. Should JD stock investors be worried about the exodus? You betcha, but for other reasons. Talent Takes FlightIt's easy to point to JD.com's chief executive as the reason for the culture problem at the company. However, a more significant concern might be that the real reason people are leaving is that JD.com is losing the e-commerce battle to Alibaba (NYSE:BABA), Pinduoduo (NASDAQ:PDD) and all the other smaller e-commerce companies that do battle in China. "Talented workers are starting to quit because they are worried about the outlook for the company," the Nikkei Asian Review reported, quoting an anonymous employee. My InvestorPlace colleague Dana Blankenhorn recently discussed the growth issues facing JD.com. "Serving 60-something moms and dads in rural villages is unique but selling refrigerators to their kids in Shanghai is harder," he wrote on June 19. "Despite having stores as big as 500,000 square feet, that's where I place my worries because then JD.com is competing directly with Alibaba."Dana believes that a profitable JD.com is a stock worth considering given it trades at the same price-to-sales ratio as Walmart (NYSE:WMT), the largest retailer in the world. Profits are always good. In the first quarter ended March 31, JD.com generated $190.7 million in free cash flow, which is 1.1% of revenue in the quarter. By comparison, Alibaba generated $1.6 billion in free cash flow in its latest quarter ended March 31, representing 11.5% of its revenue. JD.com might be profitable in 2019, but it's got a long way to go to meet Alibaba's cash flow generation. There's No ProblemJust before CEO Liu's arrest in late August, I was still on the JD.com bandwagon. I didn't think it was in Amazon's (NASDAQ:AMZN) league, but I believed it had a good business. "I don't think JD shareholders need to worry about the company's business. Overall, it's very strong. Unless it delivers a dud of a quarterly report, the mid $30s appear to be an artificial floor," I wrote August 6. "I wouldn't be surprised if JD stock was trading over $50 by this time next summer."By Labor Day, Liu had been arrested, resulting JD stock down to the high teens by the end of the year. It has since recovered most of those losses. After the Liu revelations, guilty or not guilty, I recommended that investors stay away until the truth came out. Although that's still a matter for the civil courts, the CEO hasn't been charged with a crime. End of, as the Brits say. * Stocks to Buy for $20 or Less Another InvestorPlace colleague, Luke Lango, who owns JD stock, recently suggested that JD.com's Amazon-like growth strategy was back on track. "Revenue growth has stabilized over the past two quarters around 20%, and projects to stay at 20% next quarter too. Meanwhile, operating margins expanded 70 basis points in the fourth quarter of 2018, and 80 basis points in the first quarter of 2019," Luke wrote June 17. "Thus, the Amazon roadmap of sustained big revenue growth on top of margin expansion is once again the underlying trend at JD."If you read between the lines, the fact that employees are leaving JD.com has less to do with its business outlook and more to do with the fact people don't stay with companies nearly as long as they once did. It's time to turn the page. Bottom Line on JD StockWhile I agree with most of my colleague's sentiments about JD.com, I have less conviction that JD stock is going to run much higher in 2019. Perhaps it gets to the mid-$30s with another good earnings report. Beyond that, I'm doubtful. As for employees leaving, I wouldn't give it a second thought. Good people leave companies all the time. JD.com's no different. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Value Stocks to Buy for the Second Half * 7 Hot Stocks to Buy for a Seemingly Sleepy Summer * 6 Chip Stocks Staring At Big Headwinds in 2019 Compare Brokers The post Should JD.com Stock Holders Be Worried About Employee Exodus? appeared first on InvestorPlace.

  • 4 Burning Questions for the Owners of Alibaba Stock

    4 Burning Questions for the Owners of Alibaba Stock

    In May, Alibaba (NYSE:BABA) reported what appeared to be blowout earnings. The report topped expectations by a mile, but it did nothing for Alibaba stock. BABA stock price barely advanced following the earnings release, and it is still down 9% over the last three months.Source: Shutterstock What's going on? Surely, some of the struggles of Alibaba stock are related to the trade war. The longer it drags on, the more the Chinese economy will continue to slump. But Alibaba faces some unique issues of its own, namely that people are increasingly questioning the company's accounting. BABA is now trying to sell more stock to the public, while its short interest has ballooned to 9% of its available shares. That's a massive number for a company of its size. * 7 Value Stocks to Buy for the Second Half The shorts have been encouraged by the internet posts of a person who claims to be a financial professional These posts, made under the name Deep Throat IPO, contain allegations about Alibaba's accounting, leading many investors to conclude that BABA can't be trusted.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Is Alibaba Actually Earning Much Money?For last quarter, Alibaba reported a huge jump in its net income. In fact, on both a GAAP and non-GAAP basis, Alibaba crushed analysts' average expectation. It reported non-GAAP earnings per share for the quarter of $1.28 against the consensus outlook of just 95 cents. Meanwhile, its GAAP EPS of $1.47 absolutely annihilated analyst estimates of just 51 cents per share.What explains the huge disparity? Most of Alibaba's reported profits for the quarter came from marking up the value of its investments rather than from its operating businesses. For the quarter, its reported net income soared 252% year-over-year to $3.5 billion. However, its actual profits from its operating business went down 5% to just $1.3 billion, though it would have posted a modest gain if it hadn't had to pay a lawsuit settlement.Still, its worth asking what's going on. Alibaba reports phenomenal revenue growth rates, yet its core retail profits are essentially flat. And its much-touted cloud and digital media divisions continue to lose money. Take out the increased profits from its investments - which doesn't mean much unless BABA can turn that paper into actual cash in the future - and BABA stock is absurdly expensive compared to its actual cash earnings. Is Alibaba Really Bigger Than Wal-Mart And Amazon?There's long been a great deal of dispute over whether Alibaba and other Chinese retailers inflate their GMVs (Gross Merchandise Volume). The SEC probed Alibaba's sales reporting a few years ago, and investors have made allegations about other Chinese firms like PinDuoDuo (NASDAQ:PDD) inflating their revenue.In the case of Alibaba, the numbers get more and more questionable as time goes on. Alibaba claims its GMV has soared more than tenfold from 2012 to today, with that figure jumping from $80 billion then to more than $800 billion now. For comparison sake, that's more than Walmart (NYSE:WMT) and Amazon (NASDAQ:AMZN) handle annually combined! You might say that Alibaba's business could be that big because China is so huge. Remember, though, that Walmart is a leading retailer in 25 countries and Amazon has a huge overseas businesses as well. It strains credibility to believe that Alibaba is larger than Walmart and Amazon put together.There's also the matter of how much each company generates per employee. That is a common check for fraud, and Alibaba comes out looking rather peculiar. Deep Throat IPO puts it well:The other ratio I find fascinating is GMV per employee. Walmart's GMV per employee is $284,000. Amazon's is $428,000. Alibaba's is $8,366,000 per employee. They are truly masters at doing more with less.Is it realistic for Alibaba's employees to be 20 times more efficient than Amazon's? If you own BABA stock, you better hope so. Is Ant Financial Worth Anything Close To Investors' Expectations?Supposedly, Alibaba's Ant Financial, a digital payments facilitator, is worth $150 billion, which would make up around a third of the overall $400 billion market cap of Alibaba stock. In fact, Ant Financial was valued at $150 billion when it raised money last year. However, there is reason to be skeptical about that valuation. Specifically, it scrapped plans for an IPO last year, and it was supposed to launch an IPO this year, but the offering appears to be delayed again.Meanwhile, Ant Financial, which is supposed to be such a dominant global payments player, doesn't appear to be doing so well. Last year, Alibaba, which has a profit-sharing agreement with Ant Financial, did not receive any distributions from Ant because Ant didn't make any profits. This past quarter, however, Alibaba earned $77 million from Ant Financial. $77 million seems like a pittance, given Ant Financial's supposed $150 billion valuation. Perfectly normal. What Happens If the Chinese Financial System Freezes Up?For all of Alibaba's purported profits, the company keeps needing more money. There's probably good reason for that, since most of its "profits" don;t come in the form of cash while it is investing money in a nearly endless list of start-ups both in China and overseas. As mentioned above, Ant Financial did a big fundraising push last year, and now Alibaba is trying to unload a cool $20 billion of its stock in a secondary offering in Hong Kong.All this brings up the trade war and the weakening yuan. The yuan is near seven per dollar, its lowest level in years, and pressure appears to be growing for a major devaluation of the currency. What happens to Alibaba's ability to raise more money to keep its investing carousel spinning if China's capital markets freeze up? Also, the valuations of all these nascent businesses Alibaba has invested in will implode if the IPO window shuts down for these sorts of firms. The Verdict on BABA StockIt's been interesting watching Alibaba and JD.com (NASDAQ:JD) over the past year or two. As the Chinese economy has slowed, many of China's retailers have seen their growth rates sharply drop. JD, for example, has gone from 50% annual growth to just 20% recently. Alibaba's growth rate, however, appears totally unaffected by the deepening Chinese malaise. It keeps pumping out 50% annual revenue growth, rain or shine. Does Alibaba have a special sauce that keeps it immune to economic weakness?So far, BABA stock has been a winner. But how long can it keep up? Alibaba already claims to be larger than Amazon and Walmart put together. If the numbers are real, surely BABA will run out of people to sell to fairly soon; there are, after all, limits to a company's growth once it dominates a market. And if the numbers aren't real…At the time of this writing, Ian Bezek owned JD.com stock. You can reach him on Twitter at @irbezek. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Value Stocks to Buy for the Second Half * 7 Hot Stocks to Buy for a Seemingly Sleepy Summer * 6 Chip Stocks Staring At Big Headwinds in 2019 Compare Brokers The post 4 Burning Questions for the Owners of Alibaba Stock appeared first on InvestorPlace.

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