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JD.com Prices Secondary Offering, Stock Moves Up - Analyst Blog

Shares of JD.com, Inc. ( JD ) were down 2.9% yesterday after it announced the pricing of its secondary offering of aggregate 26,003,171 American Depositary Shares (ADS). The shares were priced at $23.80 per unit by certain selling shareholders.

Each ADS represents two Class A ordinary shares of the Chinese online retailer. Shareholders who are divesting their shares are expected to get gross proceeds of about $619 million from the offering at closing. Notably, BofA Merrill Lynch and UBS Investment Bank are the main book-running managers for the offering.

Huang River Investment Limited, a company entirely owned by Tencent Holdings Limited (Tencent) bought $150 million of ADS whereas a partner of Tiger Global entities (Tiger) purchased $47.6 million worth of shares. Both are existing shareholders of the company and acquired the shares at the offer price and per the existing terms and conditions.

JD's shareholders including the Chairman, Tiger, Tencent and the divesting shareholders have decided not to sell, transfer or dispose of the ADS', ordinary shares or similar securities for a period of 90 days after the offering.

This Chinese online retailer debuted in the U.S. stock market in May and has risen nearly 18% since then. JD.com is the largest online direct sales company in China in terms of transaction volume with a market share in China of 45%, according to its IPO filing.

In November, JD reported that its third quarter sales increased 61% from the year-ago period. The company expects its fourth quarter revenues to be up 59% to 64% on a year-over-year basis.

JD currently carries a Zacks Rank #3 (Hold).

Meanwhile, one can consider better-ranked players from the same industry like Geeknet, Inc. ( GKNT ), Mercadolibre, Inc. ( MELI ) and Overstock.com Inc. ( OSTK ). All these stocks hold a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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