Alibaba skids as revenue growth slowest in three years
By Paul Carsten
BEIJING (Reuters) - Alibaba Group Holding Ltd's shares fell to a record low after China's biggest e-commerce company posted its slowest revenue growth in over three years as its strategy to shift more services to mobile devices hurt advertising sales.
The company's shares declined as much as 8 percent to $71.03 - just shy of their IPO price of $68 - wiping off nearly $16 billion from its market value on Wednesday. The stock has lost declined nearly 30 percent this year, up to Wednesday's close.
Alibaba also announced a $4 billion share repurchase program over two years, aimed at offsetting the impact of its share-based compensation programs.
The company's results come at a time when China's economy is expected to grow at its slowest pace in a quarter of a century. Adding to investor concerns, China devalued the yuan on Tuesday, guiding the currency to its lowest point in almost three years.
Alibaba's Chief Executive Daniel Zhang told CNBC on Wednesday that the company was closely monitoring the economy but was "confident for long-term growth".
The company is now branching out from its core online-only shopping platforms in a bid to stem slowing growth in both revenue and the value of sales over its websites.
"(We) made significant progress monetizing our mobile traffic, with our mobile revenue exceeding 50 percent of our total China commerce retail revenue for the first time," Maggie Wu, Alibaba's chief financial officer, said in a statement.
But Wu conceded that mobile was still less profitable than business via personal computers, where profitability also decreased. Continued...