Alibaba shares slump amidst missed sales targets
Shares in Chinese e-commerce giant Alibaba have slumped just days after regulators slammed it for ‘illegal advertising’ and shoddy quality control after it missed sales targets between September and December.
The shopping juggernaut had been expected to rake in $4.4bn over the period but could only manage $4.2bn in the event, disappointing investors sky high hopes for the firm despite still representing a 40 per cent rise in sales.
Alibaba’s sales hinge on the so-called Singles’ Day, a Far East counterpart to Black Friday, on 11 November which this year pulled in $9.3bn in sales, 60 per cent up on the year prior. Some had hoped that this stellar performance could be maintained throughout the quarter but ultimately this was too big an ask.
In consequence its share price, which had been riding higher than $92, slumped by 9 per cent to reach $89.81 as investors digested the news.
Responding to recent criticism from regulators, which has also weighed on sentiment, Alibaba’s executive vice-chairman Joe Tsai said: “Nothing is more important to us than the trust we earned from our stakeholders, including our customers, business partners, regulators and shareholders. This trust is built on the expectation that everyone at Alibaba will act with absolute honesty and integrity, and to conduct our affairs with the highest standards of ethics and transparency.”