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JD Increases Investment in Vipshop, Boosting Its Stock 4%

China's e-commerce giant, JD.com, raised its stake in Vipshop to 6.8%, sending the stock of the clothing retailer up 4 percent on Monday.

CapitalWatch Staff
    Jun 18, 2018 3:33 PM  PT
JD Increases Investment in Vipshop, Boosting Its Stock 4%

China's second-largest e-commerce platform, JD.com Inc. (Nasdaq: JD), raised its stake in Vipshop Holdings Ltd. (NYSE:VIPS) to 6.8 percent through Windcreek Ltd., a subsidiary of JD.com Investment Ltd.

The news of JD's investment sent Vipshop's stock on a nearly 4 percent run-up in New York trading on Monday to $11.66 per American depositary share. 

According to a regulatory filing of June 15, Windcreek has acquired nearly 8.6 million ADSs of the Chinese online discount retailer since April at an average price of $14.15 per share. Overall, the company owns 8.9 million Class A shares in Vipshop.

Last month, the shares of Vipshop fell more than 20 percent after the company announced disappointing first quarter earnings. According to its report, Vipshop saw stagnant active users growth and little initial effect from partnerships with e-commerce giants JD and Tencent Holdings Ltd. in the first three months.

The company said net income attributable to its shareholders for the first quarter this year was $84.5 million, or 12 cents per American depositary share, compared with $88 million, or 15 cents per share, for the prior-year period. 

For the second quarter of 2018, Vipshop said it expected revenue growth to between $3.2 billion and $3.4 billion, representing a year-over-year increase of approximately 17 to 22 percent.

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The stock of Vipshop closed at $11.67 per ADS, up nearly 4 percent, on news of JD's investment in the company.

(Source: Thomson Reuters Eikon)

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