Insider Buying

JD.com Founder files Form 144 while the platform makes plans for Food Delivery

One market that has grown exponentially is E-commerce. A source dictated that revenues from this market is expected to strike as much as $1,412.00 billion this year. Another source stated that China accounts for more than half of global online retail and experiences ongoing growth of online and offline integration”. Once upon a time, Jack Ma’s Alibaba empire was the face of e-commerce in China. Today, multiple other digital marketplaces have been rising out of the orient, JD.com Inc (9618: HK) being one of them.  

In the past few months, Chinese tech and e-commerce stocks have been performing fairly well. In contrast to other high M Cap stocks, like Amazon.com Inc (AMZN: US) and Ebay Inc (EBAY: US). Their stock prices have plunged by nearly 36.06% and 35.43% respectively in the year to date.

But while JD.com is on the right track with steady stock price and new developments, a top-level insider in the company headed off in a completely different direction. 

Founder filed Form 144

9618: HK’s stock price is down by 14.90% in the past year. Although the stock is far from the shorting stage, the company’s Founder/Chairman filed a Form 144 on June 17. 

Liu Qiangdong (Richard), who founded the company in 2004, filed the form for 4.5 million ADS (American Depositary Shares). In total, the worth of these ADS is almost $293.54 million. This is not the first time that the Founder had sold 9618:HK shares. From June 15 to 16, he sold up to 905,253 ADS, their value being almost $56.7 million. He isn’t the only insider to walk down this route either. 

The company’s CFO,  Xu Ran (Sandy) filed her form a mere two days before the CEO. Her form was for 3,500 ADS valued at approximately $225,120. 

Both forms were filed via the broker, The Core Securities Co Ltd.

Attracting competition

A recent headline stated that JD.com was in talks to venture into the food delivery industry. The announcement came on June 17, when the stock price opened at $67.31, an 8.55% hike compared to 9618: HK closing price the previous day. Furthermore, this area of expertise could put the company in further competition with China’s other e-commerce giants, like Alibaba itself.

Alibaba Group Holding (9988: HK) once attracted headlines for all the wrong reasons, leading to a sharp decline in stock price. In a turn of events, 9988:HK’s price soared by 30.50% in the past month. 

The aforementioned article also pointed out one of JD’s biggest strengths: speedy delivery services. The platform has already begun talks with restaurants, showcasing that it is heading deeper into the planning stage. There could of course be an entirely different reason for the form filed by Liu Qiangdong, who stepped down as CEO in April

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