China-based e-commerce solutions company Baozun Inc. (NASDAQ:$BZUN) saw a fall in its stock on Tuesday, August 22nd, despite beating average analysts’ revenue expectations by $2 million. The company’s stock had just previously hit an all-time high just four days ago, getting to $35.91. The fall has largely been attributed to the company missing average analysts’ earnings per share of $0.10. Instead, Baozun reported an earnings per share of $0.08.
Besides falling short of analyst expectations, investors are concerned over Baozun’s growth and free cash flow. So far this year, Baozun has already spent about 9% of its cash pile in order to invest in logistics. The company has also scaled down the growth rate of some of its services from 59% to 50%.
The market’s reaction to Baozun’s third quarter results has surprised several investors and analysts as the Chinese Internet industry had been doing extremely well recently. Big-name companies like Alibaba (NYSE:$BABA), Tencent (HKG:$0700), and Baidu (NASDAQ:$BIDU) had been leading the Chinese Internet industry and providing confidence to its investors. Baozun’s fall on August 22nd – along with the fall of a Chinese social media company’s stock on the same day – signaled a rare loss of confidence investors had in the currently booming industry.
As of Tuesday’s closing on August 22nd, Baozun’s stock has fallen by a dramatic 24.19%. The stock closed at $26.23.
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