JD.com shares slide after Walmart confirms sale of entire stake

Shares of JD.com Inc. fell about 8 percent on the Hong Kong stock exchange and lost more than 8 percent in early morning trading on the Nasdaq after retail giant Walmart Inc. announced the sale of its entire stake in the Chinese e-commerce company. Walmart expects the sale will help it focus on its strong China businesses for Walmart China and Sam’s Club and deploy capital for other priorities.

Walmart said in a filing with the U.S. Securities and Exchange Commission (SEC) that it no longer holds shares in JD.com, but did not provide further details.

Meanwhile, Bloomberg reported that the retail giant raised about $3.6 billion by selling 144.5 million JD.com shares at a price of $24.95 per share.

In June 2016, Walmart entered into a strategic alliance with JD.com, then China’s largest e-commerce company, and a wide range of Business Initiatives covering both online and offline retail. Walmart had received around 144.95 million shares of JD.com, representing about 5 percent of the total shares.

Under the agreement, the companies have cooperated in e-commerce, including opening Sam’s Club Flagship Store and Walmart Flagship Store on the website www.jd.com, as well as Sam’s Club Global Flagship Store, Walmart Global Flagship Store, ASDA Flagship Store and several global category stores to sell products of specific categories on JD Worldwide.

The deal also included one-hour delivery service from Walmart stores and Sam’s Clubs in select cities through the JD Daojia app. JD.com also entered into an eight-year non-compete agreement with Walmart, subject to certain conditions and exceptions.

In addition, JD.com stated in its 2023 annual report that Walmart owned 9.4 percent of the company’s common stock as of March 31, holding just over 289 million shares.

Walmart said JD has been a valued partner over the past eight years and that the company is committed to continuing its business relationship with them.

Last week, JD.com reported a significant increase in profit in the second quarter, with net sales increasing by 1.2 percent. Net sales of products remained stable, while net sales of services increased by 6.3 percent.

In Hong Kong, JD.com shares traded at HK$102,400, down 8.73 percent.

On the Nasdaq, JD.com shares lost around 8 percent and closed at $25.93.

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