PDD: Pinduoduo Shares Slide After Weak Revenue, App Pulled From Google Play
- Pinduoduo shares fell sharply after it missed expectations for its fourth quarter revenue.
- However, the company reported its revenue to have grown by 65% from the previous quarter.
- The company’s shopping app has also been suspended from Google Play for malware concerns.
Chinese e-commerce giant, Pinduoduo, has been in a pretty strong position over the past year, with a 75% share price increase. This week however, its success has been threatened by a series of unfortunate events which have shaken investor confidence in the company. Pinduoduo certainly isn’t alone in experiencing uncertainty in the tech industry right now, but concerns surrounding its mobile app could compromise consumer trust in the platform as well.
Revenue angst
The first of Pinduoduo’s current woes is its most recent revenue report. On Monday, the company reported fourth quarter revenue of $5.79bn, which fell short of analyst expectations at $5.95bn. The news caused a 14% drop in its share price as investors predicted trouble ahead for the company. With that being said, some analysts have described the selloff as an overreaction, as it represents 65% revenue growth from its previous quarter – which is more than can be said for its competitors like JD.com which only logged single digit percentage growth.
Google suspends app
The other thing troubling Pinduoduo at the moment is the removal of its app from the Google Play store. Google said that they had detected malware contained within the app, and have suspended it from the Google Play store as a security precaution. Pinduoduo hit back by describing Google’s claims as “inconclusive”, but security auditors have said that malware can be publicly viewed in previous versions of the app on its GitHub page. It also comes at a time when Chinese apps including TikTok are coming under increased regulatory scrutiny surrounding how they handle data.