Alibaba profit misses expectations; $4 billion buyback planned
Faced with a slowing economy, new challenges making money on smartphones and a little bad luck, Alibaba’s stock has fallen about 35 percent from its November highs, and was just 14 percent above the IPO price of $68 before the latest results were released.
The program is intended to help offset dilution of shares from employee compensation tied to stock.
In a rare moment speaking for Alibaba’s founder, Jack Ma, the company’s executive vice chairman, Joe Tsai, said that neither of them would sell shares.
Tsai said Yahoo’s and SoftBank’s shares also unlock next month.
Since Yahoo announced its intention to spin off its Alibaba stock in January, those shares have lost more than $11 billion in value.
In June, the company warned that a government ban on selling online lottery tickets and a decrease in fees for its group-buying marketplace would affect earnings.
“I think most of the disappointment is from the monetization rate, which dropped after the IPO,” said Elinor Leung, an analyst at the brokerage and investment group CLSA, referring to the amount the company makes from each user of its services.
Net income that excluded investment gains, which does not meet generally accepted accounting principles, was $1.5 billion, in line with analysts’ expectations.
The company is trying to offset a drop in profit in recent quarters that largely stems from troubles in the Chinese economy.
Alibaba has also experienced a tough transition to smartphone advertising and a slowing growth rate in the number of Chinese Internet users.
Suning has a logistics and retail store network that covers China’s many remote and less-developed areas, where those least likely to shop online live and work.