Wednesday 18 July 2018

Alibaba tells staff to ignore share plunge in China market crisis

Jack Ma, the founder of Alibaba. Photographer: Chris Ratcliffe/Bloomberg
Jack Ma, the founder of Alibaba. Photographer: Chris Ratcliffe/Bloomberg

Andrew Trotman

Chinese e-commerce giant Alibaba has told its staff to ignore a plunge in its shares that has left them trading below the initial public offering price.

The company saw its stock fall 3.5pc to $65.80 on Monday, below the $68 seen during its record-breaking $25bn flotation last September and far less than the $119.15 high in November.

Disappointing financial results at Alibaba have been followed by a recent global stock market crash that has wiped billions off the world's biggest companies. However, Daniel Zhang, who took over as chief executive just three months ago, has now moved to reassure his 35,000 workers.

“Let’s forget about the stock prices,” he wrote in an email. “We should not be distracted by short-term obstacles, but plan for the future and stick to it.

“This is not the first time that the global stock market has plunged. It is not the last time, either. I hope everyone can shift the focus from the stock market to customers.

“Sometimes it is a lonely journey, sticking to your principles. But we have to go through lots of ups and downs during this journey. We are not in a single fight, but a fight that lasts for 102 years.”

That was a reference to Alibaba's aim to exist for at least three centuries, after being founded in 1999 by former schoolteacher Jack Ma.

Earlier this month, the New York-listed conglomerate - which owns Amazon-style Tmall, eBay rival Taobao, and Juhuasuan, a discount sales website similar to Groupon - reported a 28pc rise in revenues to $3.27bn for the three months to June 30, missing analysts' estimates of $3.39bn.

Net income, excluding investment gains, rose by 30pc to $1.53bn, boosted by a rise in the number of active buyers to 367m.

Alibaba's shares rose 3.4pc to $68.05 in early trading on Tuesday.

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