From Partnership to Breakup: The Story Behind Walmart’s Sale of JD.com Shares
Walmart has sold all its JD.com shares, cashing out $3.6 billion and ending their 8-year partnership. In 2016, Walmart and JD.com announced a strategic partnership and Walmart bought 145 million JD.com shares for about $1.5 billion, which was about 5% of JD.com at the time. Walmart didn’t join JD.com’s board or get involved in its management, acting mainly as a financial investor. Now, Walmart wants to focus its resources on its China business and Sam’s Club, putting funds into faster-growing areas.
Over the 8 years, Walmart’s stock has gone up 208%, while JD.com’s stock has only increased by 3.05%. JD.com’s stock hit a peak in February 2021 and has since fallen by 73%, while Walmart’s stock has risen more than 50%.
Despite JD.com’s revenue and profitability improvements, its stock market performance has been poor, reflecting investor worries about the economy.
Walmart’s latest report for Q2 2024 shows a global revenue increase of 4.8%, with China sales up 17.7%, and e-commerce sales growing by 23%. Walmart’s PE ratio is 38, while JD.com’s is only 8, showing Walmart is valued much higher by the market.
![From Partnership to Breakup: The Story Behind Walmart’s Sale of JD.com Shares](https://ussnsimg.moomoo.com/sns_client_feed/1629598/20240822/662ba1d0ce4bc3fed4261123f109fa23.jpg/big?area=999&is_public=true)
Walmart has been shutting down unprofitable stores in China since 2019, shifting focus to higher-end Sam’s Club and e-commerce. This decision to sell JD.com shares and reallocate resources highlights Walmart’s dissatisfaction with JD.com’s performance and its strategic shift.
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