Stock Markets
Walmart unwinds JD.com investment, to focus on own China ops
By Kane Wu, Summer Zhen
HONG KONG (Reuters) -Walmart sold its entire stake in JD (NASDAQ:).com, ending an eight-year investment in the Chinese e-commerce firm that was yielding waning returns, and the U.S. retail giant said it would focus on its own operations in China.
The move comes as competition for online shoppers’ money in China has led to steep discounts from companies including JD.com as well as Alibaba (NYSE:), which has squeezed their margins.
“This decision allows us to focus on our strong China operations for Walmart (NYSE:) China and Sam’s Club, and deploy capital towards other priorities,” Walmart said in a statement, adding it was committed to a continued commercial relationship with the Chinese company, which carries Walmart goods on its website.
Walmart invested in JD.com in 2016 by selling its Chinese online grocery store Yihaodian to JD.com in return for a 5% stake in JD.com itself.
Shares of JD.com have fallen around 70% from their peak in early 2021 and prices are close to the levels in 2016. JD.com sales growth has stagnated after the pandemic as shoppers have flocked to rival low-cost e-commerce firm Pinduoduo (NASDAQ:).
The US retailer’s share sale was fully subscribed, a person familiar with the matter told Reuters on Wednesday, and would be worth $3.74 billion at the top end of the offered range.
“Walmart wanted to get exposure in China in 2016 and kind of learned the retail business there,” said Thomas Hayes, chairman at investment firm Great Hill Capital. “They did it and they expressed that interest through JD and now they have their own exposure and their own interests in China, and they no longer need a minority position in JD when they have a great business themselves.”
JD.com said in a statement on Wednesday it was confident about the future cooperation between the two companies. As part of the original contract, Walmart and JD.com worked together to leverage their supply chains, broadening the range of imported products for Chinese consumers.
JD.com’s Hong Kong-listed shares closed nearly 9% lower on Wednesday. Its U.S.-listed shares were down 5% in midday trading.
Shares of Walmart were up 0.6% on Wednesday, after hitting a record high of $75.58.
In the latest quarter, Walmart reported a 17.7% year-on-year rise in revenue from its China business to $4.6 billion on the back of strong growth in its Sam’s Club warehouse chain and its digital offering.
Its membership income in China from its Sam’s Club business grew 26% as member count continues to increase. The company has about 48 clubs in China.
Walmart offered 144.5 million American depositary shares of JD.com in the price range of $24.85 to $25.85, according to a term sheet seen by Reuters. Morgan Stanley was the broker-dealer of the offering.
The shares were offered at a discount of up to 11.8% to Tuesday’s closing price of $28.19. Morgan Stanley did not respond to a request for comment.
The stake sale allows Walmart to raise capital and refocuses JD.com on its core online business, but a strategic partnership between the pair can continue, especially in data sharing, said Jeffrey Towson, a Beijing-based partner at TechMoat Consulting.
Macquarie has reaffirmed its expectation that the Federal Open Market Committee (FOMC) will implement a single 25 basis points rate cut following the latest U.S. consumer price index (CPI) data.
The headline CPI in December remained robust, increasing by 0.4% month-over-month, influenced by strong food and energy prices, continuing an accelerating trend that has been observed since mid-2024.
In contrast, the core CPI, which excludes volatile food and energy prices, showed a softer increase of 0.23% month-over-month, marking the lowest reading since July.
This was considered a positive development by Macquarie, especially since core PPI subcomponents released earlier in the week had indicated a potential for a higher inflation reading. The year-over-year core CPI inflation rate held steady at 2.9%.
Macquarie analysts anticipate that the core Personal Expenditures (PCE) price index, a preferred inflation measure by the Federal Reserve, will likely mirror the core CPI’s recent performance.
They also expect core CPI inflation to moderate in the first quarter of the year, aided by favorable base effects and monthly core readings similar to those of December. However, they caution that threatened tariffs could pose an upside risk to inflation beyond the current forecast horizon.
The investment bank maintains that the FOMC is likely to reduce interest rates by 25 basis points only once more, predicting that the most probable timing for this action would be in March or May.
Macquarie also notes that the risks are tilted towards a later date for the rate cut.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
HERNDON, Va. – Beacon (NASDAQ:BECN), a Fortune 500 distributor of specialty building products, has rejected an unsolicited acquisition proposal from QXO, Inc. (NASDAQ:QXO). The offer, dated November 11, 2024, to purchase all outstanding shares of Beacon for $124.25 per share in cash, was unanimously deemed insufficient by Beacon’s Board of Directors. According to InvestingPro data, QXO maintains a strong balance sheet with more cash than debt and a current ratio of 258.64, suggesting ample financial flexibility for potential acquisitions.
The Board, after thorough consultation with independent financial and legal advisors, concluded that the proposal significantly undervalues Beacon’s growth prospects and future value creation potential. Beacon’s Chair of the Board, Stuart Randle, stated that the offer fails to reflect the company’s strategic plan and its potential for growth, emphasizing that Beacon has produced a total shareholder return of over 200% in the past five years. This contrasts sharply with QXO’s market performance, which InvestingPro data shows has declined by nearly 85% over the past year, with particularly volatile stock movements.
Beacon has attempted to engage with QXO to discuss valuation, subject to a standard non-disclosure agreement (NDA), which QXO declined. The company also offered to limit confidentiality obligations and structured the NDA to allow QXO to participate in a proxy contest at the upcoming 2025 annual meeting of shareholders.
Julian Francis, President and CEO of Beacon, expressed confidence in the company’s growth trajectory and the execution of its Ambition 2025 strategy, which aims for above-market growth and operational excellence. While QXO shows promising revenue growth potential with InvestingPro forecasting 92.7% growth for the current year, analysts don’t expect profitability in the near term. Beacon anticipates revealing more about its long-term financial targets at an Investor Day scheduled for March 13, 2025. Get deeper insights into both companies’ valuations and growth metrics with an InvestingPro subscription, which offers exclusive financial health scores and detailed analysis.
J.P. Morgan is serving as Beacon’s financial advisor, with Sidley Austin LLP and Simpson Thacher and Bartlett LLP as legal advisors. Beacon, established in 1928, operates over 580 branches across the U.S. and Canada and is known for its private label brand TRI-BUILT® and the digital account management suite Beacon PRO+®.
The company advises shareholders that no action is needed at this time and plans to file relevant documents with the U.S. Securities and Exchange Commission (SEC) for the upcoming annual meeting.
This news is based on a press release statement from Beacon.
In other recent news, QXO, Inc. has been busy with noteworthy developments. The company’s stockholders approved a key executive compensation plan at the 2024 Annual Meeting, electing all the company’s nominees for director and ratifying the appointment of Marcum LLP as the independent registered public accounting firm for fiscal year 2024. In parallel, QXO has been actively seeking growth through acquisitions, as indicated by its proposal to acquire Beacon Roofing Supply (NASDAQ:), following a declined offer to take over Rexel (EPA:), a French electrical products distributor.
Additionally, QXO has announced the appointment of Ashwin Rao as the new chief artificial intelligence officer. Rao, with over three decades of experience in enterprise AI, is expected to lead QXO’s tech initiatives, including demand forecasting, inventory management, and e-commerce. This move aligns with QXO’s strategy to become a leading tech-forward entity in the building products distribution sector.
Goldman Sachs reiterated its Buy rating on QXO, further signaling confidence in the company’s growth prospects. However, it’s important to note that these plans involve inherent risks and uncertainties, and are not guarantees of future performance. These recent developments reflect QXO’s current plans and expectations, highlighting a period of strategic moves and appointments.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Michael Catelani, the President, Chief Operating Officer, and Chief Financial Officer of Anixa Biosciences Inc. (NASDAQ:), recently purchased 9,289 shares of the company’s common stock. The $71 million market cap company maintains a strong financial position, with InvestingPro data showing a healthy current ratio of 8.54 and minimal debt on its balance sheet. The shares were acquired at a price of $2.15 each, resulting in a total transaction value of $19,971. Following this acquisition, Catelani now directly owns 44,500 shares of Anixa Biosciences. This transaction was reported in a recent SEC filing. The purchase comes as the stock trades near its 52-week low of $2.07, with analyst price targets ranging from $7 to $10. InvestingPro subscribers can access 8 additional key insights about ANIX’s financial health and market position.
In other recent news, Anixa Biosciences has made significant strides in its cancer research efforts. The company has reported a net loss of $3.1 million for the second fiscal quarter of 2024, less than the projected loss of $3.5 million. Analysts from EF Hutton and H.C. Wainwright have initiated and maintained a Buy rating for the company, despite H.C. Wainwright reducing the 12-month price target to $7.00.
Anixa Biosciences also announced a strategic decision to acquire as part of its treasury reserve assets, aiming to diversify its treasury and leverage the anticipated long-term value of digital currencies. In addition to this, the company is continuing its stock buyback program, reinforcing its commitment to increasing shareholder value.
In its ongoing clinical trials, Anixa Biosciences has successfully dosed the first patient in the third cohort of their Phase 1 trial of CAR-T therapy for ovarian cancer. The company, in collaboration with Cleveland Clinic, has shown promising results in its Phase 1 breast cancer vaccine trial with over 70% of patients exhibiting immune responses.
Other recent developments include the announcement of a share repurchase program and the addition of Dr. Sanjay Juneja to the Cancer Business Advisory Board. Anixa Biosciences has also received a Japanese patent for its breast cancer vaccine technology. These are among the recent developments in Anixa Biosciences’ pursuit of advancing cancer treatment and prevention.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
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