JD.com: Will Richard Liu Deliver In 2019?

Dec. 06, 2018 7:46 AM ETJD.com, Inc. (JD)BABA, PDD, TCEHY, TCTZF23 Comments
ALT Perspective profile picture
ALT Perspective


  • With the big drop in the share price of JD.com this year, 2018 is without a doubt a year to forget for most shareholders.
  • Business growth remains unimpeded by the rape allegations against founder Richard Liu.
  • Relatively new e-commerce player, Pinduoduo, is only around $5 billion lower in market cap from JD.com.
  • The positive vibes manifested by the management during the 3Q 2018 earnings conference call bodes well for a brighter 2019.

2018 is a year to forget for JD.com's shareholders

With the big drop in the share price of JD.com (NASDAQ:JD) this year, 2018 is without a doubt a year to forget for most shareholders. I did an overview of JD.com’s 3Q 2018 results in the inaugural Chinese Internet Weekly newsletter a fortnight ago. A reader requested for a more comprehensive take of what had happened to the company and the stock in particular. Hence, the motivation for this article.

JD.com started the year on a strong momentum, riding on the various initiatives from 2017. These initiatives included the opening of over 1,000 fresh food stores in China and the recruitment of Pei Jian, a renowned big data researcher and computing science professor at Simon Fraser University in Canada, to lead JD.com's then newly created data platform and product research and development department. In mid-January, Reuters ran an exclusive story on JD.com's fundraising round at its logistics unit with a target of at least $2 billion.

Throughout the first half of the year, favorable developments continued to flow out from the largest retailer by revenue in China. The climax probably came in the middle of the year, with record sales achieved during the company-initiated 618 shopping extravaganza in June, followed by the announcement of an investment by Alphabet’s Google (GOOGL)(GOOG).

The $40.50 pricing paid by Google was a small discount to the then traded price, an indication that the search giant did the deal with the intention to collaborate, rather than a focus on ROI. The potential opportunities from the synergies between the two internet giants boosted market interest in JD.com. In particular, it was hoped that the deal would help in the international expansion of JD.com, with Google helping to open doors for the former into the lucrative North American market. Unfortunately, things started to unravel beginning in June. I

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This article was written by

ALT Perspective profile picture
I am honored to have been categorized as a 5-Star financial expert and ranked among the top 2% of financial bloggers on TipRanks in 2017/18. For a period, I was among the top 3 “Opinion Leaders” for Insider Ownership and Services, as well as top 5 for Long Ideas and Fund Holdings. I am an avid reader of market news and company publications with the aim of improving my investment acumen. I enjoy expressing my findings and opinions through writings. My appreciation and understanding of business strategies improved to a whole new level since completing an MBA (Distinction) from a FT100 MBA school. I have worked in companies with businesses that span multiple industries, according me with the exposure to a myriad of sectors.Check out my Author's Picks and over 190 Editor's Picks, among the highest in Seeking Alpha, if not the most.

Disclosure: I am/we are long BABA, JD, TCEHY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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