Alibaba’s (NYSE: BABA) stock plummeted Thursday after reports of the company’s quarterly revenue fell short of expectations.
Share prices dropped more than 9.5% to $89 in the first hour of trading. Even a close at 5.07% down would make this the worst day ever for the Chinese e-commerce company.
Slow growth and a tough holiday season are partly to blame for the company’s disappointing revenue.
Experts also note that China’s Singles’ Day may have affected the company’s quarterly growth. Singles’ Day, China’s own version of Cyber Monday, was November 11. Alibaba’s sales on that day were nearly double what they were last year, surpassing $9 billion. Sales fizzled after Singles’ Day.
Alibaba’s revenue rose 40% to $4.22 billion in the December quarter overall, but fell short of the estimated of $4.45 billion. On a brighter note, the company’s third quarter earnings were higher than expected.
The company’s executive chairman and founder says that he still expects more growth in the future. Alibaba already handles more e-commerce than eBay and Amazon combined.
Gross merchandise value (GMV) for the latest quarter was up 49% to $127 billion. Mobile accounted for 42% of the total value, which was up 35% from September’s quarter.
The number of active buyers annually on Alibaba is also up to 334 million from 397 million in September’s quarter.
Alibaba has received its fair share of criticism as of late over claims that some of the goods on the e-commerce site are counterfeit. Investors are naturally worried, but Alibaba claims that the methodology behind this report is flawed.
Yahoo (NASDAQ: YHOO) also announced on Tuesday that it would spin off its stake in the company.
Despite the fact that quarterly revenue did not meet expectations, Alibaba is expected to recover quickly. Revenue is still up 40% and GMV is also up 49%. After Yahoo’s spinoff, another corporation will take its place as 15% shareholder.