Why E-commerce Giant JD.Com Shares Are Falling Friday

JD.Com, Inc. JD shares are trading lower after reports emerged regarding rumors that a businessman with the same surname as the company's chairman had been arrested.

The chairman of the Beijing-based E-commerce giant is Richard Liu.

JD.com has filed a police report concerning a rumor, as shared in an online statement on its Weibo account, which speculated about the arrest of a businessman surnamed Liu on suspicions of legal violations, according to a Bloomberg news report.

Shares of JD had plunged, mirroring apprehensions regarding China's languid consumer spending as officials grapple with stimulating both expenditure and economic expansion, Bloomberg notes.

The downbeat sentiment emerged as multiple analysts cut their outlook on the stock, citing worries about how the firm will grow its revenue amid the sluggish macro environment in China, according to the report.

"Heading into 4Q23, despite seasonally strong 11.11 promotion, we believe cautious consumption sentiment and competitive pricing discount are likely to weigh on any meaningful rebound of growth for JD," Citigroup analysts including Alicia Yap wrote in a note, which Bloomberg has highlighted.

Earlier in August, Liu and his wife were in the headlines for reportedly spending $100 million in the U.S. to buy luxury homes. However, the firm took its stance on Weibo, saying that all these allegations are "gossip circulating on social media," according to a news report by South China Morning Post.

Price Action: JD shares are trading lower by 4.78% to $26.50 premarket on the last check Friday. 

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.