Shares of Pinduoduo Inc. (Nasdaq: PDD) tanked nearly 12% by midday Friday after second quarter sales fell short of expectations.
China’s third-largest online retailer said in a statement today that its revenues in the three months through June came in at $1.73 billion, up 67% year-over-year on a loss of one cent a share. Wall Street was expecting revenues of $1.74 billion on a loss of 21 cents a share.
Aside from the revenue miss by PDD—it was still a strong period ending June for the company. In twelve months ending June, its gross merchandise volume hit $179.6 billion, up 79% from the same period in the previous year. In the quarter ending June, it averaged 568.8 million monthly active users, representing a 55% rise from the same period in the preceding year.
“In the second quarter of 2020 we continued to devote resources to support economic recovery across China, and we witnessed great resilience amongst our merchant community,” Lei Chen, the chief executive officer of PDD, said in a statement today.
He added, “We also continued our investments in user engagement and expanded our promotional offerings to cover more household necessities and agriculture products based on user demand. Our users’ increasing recognition of Pinduoduo’s value proposition contributed to the user base growth and user activities on our platform.”
Today’s financials by PDD follows reports by its e-commerce rivals Alibaba Group Holding Ltd. (NYSE: BABA; HKEX: 09988) and JD.com, Inc., (Nasdaq: JD; HKEX: 09618) which both beat estimates.
On Thursday, Alibaba posted revenue that rose 34% year-over-year to 153.75 billion yuan ($21.76 billion), topping estimates of 148 billion yuan in the fiscal first-quarter. Its earnings came in at 14.82 yuan per share, up 18% from the year-ago period, and ahead of The Street's consensus of 13.82 yuan per share. Last week, JD posted revenues of 201.1 billion yuan ($29 billion). Earnings soared 52% year-over-year to 50 cents, beating the forecasted 38 cents.
By midday Friday, the stock in PDD was trading at $85.67 per American depositary share. As of intraday, PDD traded as low as $84.86 per share and as high $88.29 per share. Shares of PDD have now surged nearly 123% year-to-date.