Alibaba Group’s chief executive officer exhorted employees Tuesday to ignore plunging stock markets after the e-commerce giant’s shares fell below their initial public offering price for the first time.
Daniel Zhang, who took the helm of Asia’s largest Internet company three months ago, penned a memo urging his 35,000 workers to brush aside the market turmoil. Alibaba has lost about $128 billion in market value since its November peak amid a slowing Chinese economy.
“This is not the first time that the global stock market has plunged,” Zhang wrote in the e-mail. “It is not the last time, either. I hope everyone can shift the focus from the stock market to customers.”
Alibaba fell 3.5 per cent Monday to close at $65.80 in New York, dropping below its September IPO price of $68 as a global market rout revived investors’ concerns about the company’s sales growth. U.S. stocks plunged Monday, with the Standard & Poor’s 500 Index sinking into a correction, after Chinese shares tumbled the most since 2007.
“Let’s forget about the stock prices,” Zhang wrote. “We should not be distracted by short-term obstacles, but plan for the future and stick to it.”
The Hangzhou-based company’s shares peaked at $119.15 in November, with investors eager to reach Alibaba’s more than 300 million customers. Their subsequent decline has been fueled by concerns about the decelerating Chinese economy, increased competition from JD.com Inc. and government reports that Alibaba wasn’t doing enough to weed out counterfeit goods on its site.
“Sometimes it is a lonely journey, sticking to your principles,” Zhang wrote. “But we have to go through lots of ups and downs during this journey. We are not in a single fight, but a fight that lasts for 102 years.”
Billionaire co-founder and Chairman Jack Ma referred to Alibaba’s 102-year journey in an investor letter appended to its original IPO prospectus.
Zhang, one of the key architects of Alibaba’s successful “Singles Day” shopping gala, replaced Jonathan Lu as CEO in May.
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