JD.com Sets $1 Billion Share Buyback -- WSJ
December 27 2018 - 3:02AM
Dow Jones News
By Shan Li
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (December 27, 2018).
BEIJING -- Chinese e-commerce giant JD.com announced a $1
billion share buyback program in a bid to lift stock prices weighed
down by concerns about China's economy and potential sexual-assault
charges against the company's chief executive.
Wednesday's announcement of the buyback plan comes just a few
days after authorities in Minneapolis declined to charge JD.com
Chief Executive Liu Qiangdong in a sexual-assault case that arose
in August.
JD.com's American depositary receipts have plunged 52.3% in the
past year, closing at $19.75 on Monday. The buyback program is
worth about 3.5% of the company's market capitalization, and the
company said it would be completed over the next 12 months.
Shares of JD.com and other Chinese tech companies have been
battered this year as investors fret about slower economic growth
in China, tightening government regulations and the trade battle
with the U.S.
Both e-commerce rival Alibaba Group Holding Ltd. and tech giant
Tencent Holdings Ltd. are down more than 23% this year. Tencent,
which faced a regulatory stranglehold on new videogames for most of
the year, spent more than a month this year buying back its own
shares.
Compared with competitors, JD.com has fared worse in recent
months as the company dealt with the fallout from the Aug. 31
arrest of Mr. Liu in Minneapolis on suspicion of rape. On Friday,
prosecutors said they were declining to press charges. Mr. Liu has
consistently denied all wrongdoing, and prosecutors said he
acknowledged having consensual sex with his accuser.
Mr. Liu controls nearly 80% of JD.com's voting shares and the
board cannot meet without him unless he recuses himself.
With the sexual-assault charges gone, JD.com still has to
contend with China's weakening economy, which has depressed
consumer demand for big-ticket items such as appliances. Its heavy
investments into research and development have squeezed margins.
Last month, the company reported that its active customer accounts
fell from the preceding quarter for the first time since it went
public in 2014.
Write to Shan Li at shan.li@wsj.com
(END) Dow Jones Newswires
December 27, 2018 02:47 ET (07:47 GMT)
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