Dada Nexus Discloses Walmart Owns $2 Billion Stake; Chinese IPO Stock Jumps By Investors Business Daily
Retail giant Walmart (WMT) has taken a $2 billion stake in Chinese IPO stock Dada Nexus (DADA). Walmart stock edged lower while Dada stock continued to soar after breaking out of a very short IPO base on Wednesday.
The Dow Jones stock revealed in a regulatory filing it holds 94.98 million shares in the Chinese e-commerce firm, a 10.7% stake.
Walmart was already a backer when Dada Nexus disclosed the U.S. giant wanted to buy up to $30 million in shares during Dada’s U.S. IPO. Another big investor is China e-commerce giant JD.Com (JD), which had been seeking to snap up $60 million in shares.
Dada Nexus raised $336 million by selling 21 million depository shares at $16 each earlier this month. The new IPO has been making good gains since its Nasdaq debut on June 5.
Dada Nexus was formed by a merger of JD Daojia, JD’s platform for ordering from supermarkets online, and Dada, which uses crowdsourcing to fulfill deliveries. The two platforms combined deliver a range of products, including goods from supermarkets and convenience stores, fresh fruits and vegetables and drugs.
The firm seems to be doing well, despite the impact of coronavirus. Dada said active customers for its on-demand retail delivery increased to 11.9 million during the first three months of the year. This was a 68% increase from 7.1 million a year ago. The company also said the average order size has risen by more than 50% to 149.5 yuan, which is just over $21. However the company has yet to turn a profit
Dow Jones stock Walmart has been trying to snatch share in rapidly growing economies such as India and China. It outbid Amazon (AMZN) for Indian e-commerce site Flipkart, sealing a $16 billion deal for the Indian e-commerce firm in 2018. But more stringent Indian regulations have been causing headaches for both Walmart and Amazon.
Walmart Stock Slips, IPO Stock Rises
Walmart stock dipped 0.9% to close at 117.99 on the stock market today. WMT stock has formed a flat base, but MarketSmith analysis shows it is far from its buy point of 133.48. In addition, it has now fallen below its 200-day moving average.
Another worrying sign for Walmart stock is the fact its relative strength line has been declining since mid-April. It has a poor IBD Composite Rating of 38 out of a best-possible 99.
Dada stock jumped 11.7% to 22.47. On Wednesday, shares surged 20%, blasting past an 18.60 buy point from a brief IPO base. Dada stock holds a Composite Rating of 76. It’s still unprofitable, but revenue growth is very strong.
JD.com stock fell 2% after hitting a record high Wednesday. The Chinese e-commerce giant recently listed on the Hong Kong exchange as well. JD.com has a best-possible Composite Rating of 99.
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