Pinduoduo’s stock tumbles after reporting surprise profit but sales that missed forecasts

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Shares of Pinduoduo Inc. tumbled 9.5% in premarket trading Friday, after the China-based e-commerce platform company reported a surprise second-quarter profit but sales that came up shore of forecasts. Net losses narrowed to RMB899.3 million ($127.3 million), or RMB0.75 a share, from RMB1.00 billion, or RMB0.88 a share, in the year-ago period. Excluding non-recurring items, the adjusted profit per share was RMB0.06, while the FactSet consensus was for a loss of RMB1.26. Revenue rose 67% to RMB12.19 billion ($1.73 billion), but missed the FactSet consensus of RMB12.77 billion. Gross merchandise volume in the 12-month period ended June 30 rose 79% to RMB1.27 trillion ($179.6 billion), while average monthly active users in the second quarter grew 55% to 568.8 million. Active buyers for the 12-month period ended June 30 rose 41% to 683.2 million, while spending per active buyer rose 27% to RMB1,857.0 ($262.8). The stock has more than doubled (up 156.8%) year to date through Thursday, while the iShares MSCI China ETF has rallied 14.6% and the S&P 500 has gained 4.8%.
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