Chinese e-commerce giant Alibaba Group Holding Ltd witnessed a fall of more than 10 percent in its shares early on Thursday, wiping over USD 25 billion of the market value after the revenue generated in the fourth quarter fell short of the expectations of the analysts.
Alibaba’s revenue increased 40 percent to USD 4.22 billion during the December quarter. Some of the analysts have estimated the company to generate revenue of USD 4.45 billion.
The Earnings per share (EPS), which is calculated for excluding one-off and unusual items, defeated the estimates of USD 0.75, coming in at USD 0.81.
After four months of the company offering its USD 25 billion Initial Public Offering (IPO) at the New York Stock Exchange (NYSE), the investors have come up with other major concerns.
Tian Hou, an analyst at TH Capital, Beijing, said, “Today’s fall in the stock price is not about EPS, it’s about the top line growth. When Alibaba said they were expanding, investing, people’s expectations were for top line growth and the bottom line would shrink. However they did the opposite, so that was contradictory to expectations.”
The shares declined nearly 10 percent at USD 88.75 at 1528 GMT.
The State Administration for Industry and Commerce (SAIC) report has ignited fresh concerns that Alibaba has not briefed the risk factors to its investors before its bumper listing in September last year.