Chinese e-commerce giant PDD Holdings founder Colin Huang’s net worth drops by $14 billion as stock plummets nearly 30%
The founder and former chairman of Chinese e-commerce firm PDD Holdings Colin Huang, who recently became the richest person in China, experienced a significant drop in his net worth on Monday. This decrease was a result of PDD’s stock falling by almost 30% following disappointing second-quarter revenues. Huang’s estimated net worth fell to $35.3 billion, a decrease of more than 28%, pushing him down the Forbes billionaires list to No. 50 globally and No. 4 in China.
PDD Holdings stock hits a low of $97.35 after disappointing earnings report
PDD’s stock plummeted to $97.35 per share, representing a drop of over 30% and marking its lowest price of 2024. The company owns the popular online marketplace Temu, which has seen a 22% rise in its stock value over the last year. The decline in PDD’s stock value followed the announcement of missed earnings and revenue estimates for the second quarter, contributing to Huang’s significant loss in net worth.
PDD Holdings reports missed earnings and revenue expectations for Q2
PDD Holdings reported diluted earnings of 23.24 yuan ($3.20) per share and sales of 97.06 billion yuan ($13.64 billion) for the quarter ending on June 30. These figures fell short of analysts’ expectations of 100.17 yuan or $14.1 billion in sales. Despite a more than doubling of operating profit from the same quarter last year, the company faces challenges due to intensified competition and external factors. PDD’s CEO Lei Chen expressed a willingness to make short-term sacrifices as the company invests in its business.
Online marketplaces in China face economic challenges
PDD Holdings isn’t the only online marketplace in China to have reported missed expectations recently. Alibaba and JD.com have also faced challenges, with Alibaba’s net income down 28.77% in June and JD.com missing revenue projections in the same month. The economic downturn in China, with high unemployment rates and falling household income, has contributed to this trend. Young consumers in China are saving more, leading to a viral social media trend known as “revenge saving.”
Colin Huang’s rise and fall as the richest person in China
Huang founded Pinduoduo, which later became PDD Holdings, in 2015. He has seen fluctuations in his net worth, peaking at $55.3 billion in 2021 before dropping to $35.3 billion recently. Despite facing challenges with PDD’s stock performance, Huang remains a major shareholder in the company. He also founded Xinyoudi, an online games company, and e-commerce platform Ouku.com. PDD’s launch of Temu, a budget online marketplace, has positioned it against competitors like Shein.
Implications for PDD Holdings and Colin Huang
The significant drop in PDD’s stock value and Huang’s net worth highlights the challenges facing the company in the competitive Chinese e-commerce market. Despite this setback, PDD’s continued investment in its business and willingness to adapt to changing market conditions could help it regain momentum. Huang’s experiences as the founder and former chairman of PDD can offer insights into navigating the complexities of the e-commerce industry. As China’s economy evolves, online marketplaces like PDD will need to innovate and adapt to meet the changing consumer demands and economic landscape.
