A year after its blockbuster IPO, Alibaba is facing significant headwinds that are making investors very nervous. After climbing to a high of $120 per share in November, the Chinese e-retail giant has seen its stock price slump in the intervening months. After disclosing disappointing earnings results Wednesday, Alibaba’s stock slid below $74 per share, barely above its IPO price of $68.
In the quarter ending in June, Alibaba posted revenue of $3.26 billion, missing analysts’ estimates of $3.39 billion. Profits for the quarter were $4.97 billion. Excluding special items, per-share earnings were 59 cents, beating estimates of 58 cents.
Though Alibaba is still growing, revenue grew at the slowest rate in three years last quarter, according to the Wall Street Journal. The company is struggling to dominate mobile commerce in China the way it has controlled desktop purchasing. An economic downturn in China and sudden drop in the value of the country’s currency has also made investors question whether Chinese consumers will continue spending enough to spur Alibaba’s growth in the future.
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Boniface Mugo. 