Update | Alibaba stock tanks amid war of words with Chinese regulators and disappointing results
Last year saw investigations of 11,000 online commercial violations, Ministry of Commerce says amid row with Alibaba Group
The stock price of Chinese e-commerce giant Alibaba Group tumbled 8.8 per cent on the New York Stock Exchange on Thursday, closing at a three-month low of US$89.81. The stock plunged up to 11 per cent to the intraday low of US$87.36 after it posted fourth-quarter revenue results that fell short of analyst forecasts and its war of words with the Chinese regulators escalated over a report alleging counterfeits sold on Alibaba platforms.
Alibaba Group vice-chairman Joe Tsai dismissed the State Administration for Industry and Commerce (SAIC) report as flawed and threatened to make a formal complaint.
“We believe the flawed approach taken in the report and the tactic of releasing a so-called white paper specifically targeting us was so unfair that we felt compelled to take the extraordinary step of preparing a formal complaint to SAIC,” Tsai said.
The comments came at an earnings conference call late Thursday, in which Tsai said Alibaba’s revenue missed estimates because it spent more money trying to attract customers through mobile phones.
Alibaba missed the expected quarterly revenue, which came to 26.2 billion yuan (HK$33 billion) in the quarter ended December 31, compared with the 27.6 billion yuan average of 25 analyst estimates, the Hangzhou-based company said in a statement.
Net income fell 28 per cent to 5.98 billion yuan because of compensation expenses and a one-time charge, lower than the 8.8 billion yuan average of 19 analysts’ estimates compiled by Bloomberg.
