A Move of Strategic Brilliance or an Ominous Sign?
In a decisive move that captured attention in the financial world, the powerhouse of Chinese e-commerce, Alibaba Group Holding Ltd. BABA, executed a significant divestment strategy by offloading a substantial portion of its shares in the electric vehicle (EV) manufacturer, XPeng Inc. XPEV, netting a substantial $317 million in cash.
The Genesis: The transaction involved around 33 million shares of XPeng traded in the U.S., as reported by Bloomberg, courtesy of an insider.
Alibaba’s subsidiary, Taobao China Holding Ltd., pegged the shares at $9.60 each, reflecting a slim 2.9% discount to XPeng’s closing value of $9.89 on Tuesday. Commands were originally made in September 2019 when Taobao injected funds into XPeng before its IPO.
This transaction mirrors a previous event in December, where Alibaba divested 25 million XPeng shares. Nevertheless, XPeng’s ties with Alibaba endure, embellished by collaborative efforts ranging from research and development initiatives to marketing endeavors.
XPeng’s Financial Maneuvering
In recent times, XPeng boasted formidable figures, with a staggering 153.9% surge in fourth-quarter sales year-on-year, propelling to 13.05 billion yuan ($1.81 billion). Per American Depositary Share (ADS), XPeng recorded an adjusted net loss of $0.28, undercutting the anticipated loss of $0.46.
Amid these feats, vehicle deliveries skyrocketed by a massive 170.9% during the quarter, culminating in 60,158 deliveries.
Charting a bullish trajectory for the first quarter, XPeng anticipates deliveries ranging from 21,000 to 22,500 units, marking a 15.2% to 23.4% rise year-on-year. The company also foresees revenue between 5.8 billion yuan and 6.2 billion yuan, translating to a substantial annual growth of 43.8% to 53.7%.
Market Response and Outlook
Price Fluctuation: XPeng’s American Depositary Receipt (ADR) shares concluded the day with a 3.84% slump on Wednesday, settling at $9.51. Since its NASDAQ debut in August 2020, XPeng’s stock has backtracked by 58.3%, as illuminated by data gleaned from Benzinga Pro.
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Disclaimer: With intellectual inputs from Benzinga Neuro, and final green-lighted by the Benzinga editorial team.
