Weibo: JD seeks value, Tesla tries tech
E-commerce giant JD.com (Nasdaq: JD) was well represented in the microblogging realm this past week, generating debate about the company's surprisingly high valuation following its listing last month in New York. Meantime, electric car (EV) sensation Tesla (Nasdaq: TSLA) also got some new buzz from big-time booster Li Xiang, founder of the recently listed Autohome (NYSE: ATHM), who disclosed the launch of a new app and talked about the EV maker's strong early China sales.
JD was well represented in the mainstream headlines last month, after it notched a surprisingly strong IPO despite signs that the market was weakening as investors lost their appetite for China tech firms. JD's shares priced above their initially indicated range, and the stock also debuted strongly on its first trading day. Since then the shares have climbed steadily and are now 30 per cent above their IPO price, giving the company a market value of about $34 billion (HK$263 billion).
While all that looks quite good on the surface, Li Guoqing, the talkative founder of fading e-commerce rival Dangdang (NYSE: DANG), was doing some of his own analysis in what looks like his attempt to undermine a rival. That wouldn't be too difficult to understand, since Dangdang is valued at just $800 million, even though it was once China's most valuable listed e-commerce firm. Still, I have to admit there's some logic to Li's analysis.
Meantime, JD and Tencent themselves were rushing to put the final touches on their first major cooperative project that will see the former get an exclusive series of e-commerce shopping channels on the latter's popular WeChat mobile messaging service. I use the word "rushing", because JD wants to get everything ready in time for a major promotional event it has scheduled for June 18.
Meantime, let's look quickly at the latest comments from Autohome founder Li Xiang, who also goes by the name Shawn Li. I've never met Li, but have to admit I'm quite fond of his microblog posts as they often reflect his own modest roots and also a genuine affection for cars that led him to set up his company that has quickly become China's leading online source for car information.
He also discloses that Tesla's early sales from its flagship Beijing branch have already far surpassed the company's previous expectations, though he doesn't get any more specific. Tesla has said that China has the potential to become one of its biggest markets, and based on previous statements has indicated it could sell up to 8,000 vehicles there this year. Li's comments will certainly add to the huge expectations for the company in China, and everyone will undoubtedly be looking forward to Tesla's first announcement of its early sales in the market probably in the next 3-4 months.
Update: Following original publication of this post, I was informed that Tencent wasn't among the buyers of shares that raised $1.8 billion in JD.com's IPO. Tencent did buy $1.3 billion worth of JD.com shares through a concurrent private placement at the time of the IPO, raising its stake in JD.com to 20 per cent.