JD.com (JD) cannot break out of the 2023 downtrend. The stock, in which Walmart (WMT) holds a 12% position, fell off the proverbial cliff in the last week. JD stock lost 8.65% in the week and is now nearly 60% below its yearly high. Did the company’s vague, unsubstantiated confirmation that a staff member with the last name Liu got arrested have any merit?
Yahoo Finance reported that JD posted on Weibo that a staff with the same surname as ex-CEO Richard Liu was arrested. That gave bears and analysts the excuse to dump the stock.
JD has as many problems as Alibaba (BABA). Its logistics and computing units are losing value as the Communist party continues its nearly 3 yearlong crackdown. The weak economy will also hurt JD’s e-commerce business. China would reportedly invest in its stock market to stem the massive losses. It cut interest rates to slow the broken real estate market. And China’s President Xi Jinping called for tech firms to make breakthroughs in core technologies.
The President’s wishes are a dream. China historically copied American technology to limit research and development costs. Now that the world is exiting the country, China may no longer gain such knowledge.
JD’s dramatic drop suggests that investors continue to avoid the stock.
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