JD.com, a prominent online shopping company in China, increased its shares by 1.2%. This happened even when the Hang Seng index, which tracks the stock market in Hong Kong, went down.
The increase in JD.com’s shares happened after the company announced it would buy back $5 billion worth of its shares. In the stock market, this move is called a “buyback.” The move can make the remaining shares much more valuable because fewer shares will be available.
JD.com Shares Increased in China and the U.S.
After the recent announcement, JD.com shares did not only increase in China; the company’s shares traded in the U.S. also saw an increase of 2.24%. However, despite this recent increase, JD.com shares in the U.S. and Hong Kong have fallen by 20% since the start of the year. Unlike JD.com, the Hang Seng index dropped by about 0.82%; however, it is still up about 4% this year.
This is not the first time JD.com has made a buyback move this year. Earlier in March, the online shopping company announced a $3 billion buyback. According to Chelsea Tam, a senior analyst at Morningstar, it is a common practice for Chinese companies to buy back their shares when their prices and growth are low.
The analyst mentioned that another Chinese e-commerce company, Vipshop, increased its buyback program not too long ago. E-commerce companies in China are facing challenges due to the slow economy, which is why some of them are facing sluggish growth and, therefore, buying back their shares.
An example is Alibaba, another major player in China’s e-commerce sector. Alibaba recently reported earnings that were lower than expected. The company did what the other did. Earlier this year, it announced a massive $25 billion buyback.
Is JD.com a Good Investment?
A few factors will determine whether JD.com is a good investment. These factors include how well the company is doing on the stock exchange market, what is going on, and the investor’s personal goals for investing.
JD.com is one of the biggest online shopping companies in China. This gives it a strong position in the big market, which can be a significant advantage. Its recent announcement to buy back some of its shares is a sign that the company believes its stock is worth way more than what the stock market currently values. This confident stock move is a positive sign for investors.
One thing investors take into consideration is the economy of the country in which a company is mainly based. Currently, the Chinese economy is facing some challenges. These economic issues include slower growth and government regulations, which have made things hard for online shopping companies, including JD.com.
Investors are concerned about the company’s current decline in the stock market, and naturally, they would be worried about its future. JD.com also faces major competition from other big e-commerce companies like Alibaba, which makes it harder for JD.com to keep growing.
However, despite its recent dip in the market, experts still think JD.com could be a good investment in the long run. They believe this because the company has a strong market position and potential for growth in new areas like logistics and technology.
However, there might be some risks due to the economic situation. If an investor thinks that China’s e-commerce industry will continue to grow and has a high-risk tolerance, then JD.com might be a good investment.
Who Is the Largest Shareholder of JD.com?
As of this writing, the major shareholder of JD.com is its founder and CEO, Richard QiangDong Liu. He holds a significant portion of the company’s shares. This gives him considerable influence over the company’s operations and decisions.
Apart from Liu, many other investors hold significant JD stocks. The majority of these are institutional investors, including Tencent Holdings. Tencent Holdings is one of the most important institutional shareholders because it has a strategic partnership with JD.com. The various institutional shareholders and Liu, who hold major stakes, collectively control a large portion of the company, influencing its strategy, operations, and direction.
Is JD.com Bigger Than Alibaba?
Although both JD.com and Alibaba are huge online shopping companies in China, Alibaba is much bigger overall. The term “bigger” does not just define the size of each company. It includes factors like the amount of money each company makes, how much its stocks are worth, and the various types of businesses it is involved in.
Using these factors, Alibaba is much bigger. Alibaba makes more money than JD.com because it is not just an online shopping company. Alibaba is also involved in cloud computing services, finance services, and entertainment. This makes it more diversified and larger than JD.com in terms of its overall value.
On the other hand, JD.com focuses on its main business, online retail. While JD.com is very successful in this area and is a major player in the market, it is not like Alibaba. It does not have the same range of businesses as the other company.
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