Walmart Inc. (WMT) has announced plans to divest its stake in Chinese e-commerce powerhouse JD.com Inc. (JD), sending shockwaves through the market and causing a sharp decline in JD.com’s stock price. This strategic move, disclosed in an SEC filing, signals Walmart’s increasing focus on its own operations within the Chinese market.
According to reports from Reuters, Walmart aims to raise a substantial $3.74 billion by selling its 144.5 million American depositary shares in JD.com. The sale is expected to be priced between $24.85 and $25.85 per share, with Morgan Stanley acting as the broker-dealer.
The announcement triggered immediate market reactions. JD.com’s shares plummeted by 7.66% to $26.03 in pre-market trading on Wednesday, while Walmart experienced a minor gain of 0.34% during the same period.
Despite being JD.com’s largest shareholder, Walmart has reassured investors that it remains committed to maintaining a commercial relationship with the Chinese e-commerce company. Notably, Walmart, JD.com, and Morgan Stanley have not yet responded to inquiries regarding the transaction.
This strategic decision by Walmart comes on the heels of its recent impressive earnings results, which exceeded analysts’ expectations on both earnings per share and sales. The company’s strong performance, driven by market share gains and improved gross margins, has positioned Walmart as a compelling investment opportunity in the retail sector.
The sale of Walmart’s stake in JD.com highlights the evolving landscape of the Chinese e-commerce market and underscores Walmart’s commitment to pursuing its own growth trajectory within the region. The implications of this move for both companies, as well as for the broader Chinese e-commerce sector, will be closely watched in the coming months.
