Why Alibaba Shares Top the Market Today

In response to bad news for one of its rivals, a Chinese e-commerce company Alibaba Holding Group (WOMAN 3.07%) saw a bit of a bull run on its stock. The company’s American Depository Deposits (ADRs) rose more than 3% on Wednesday, easily outpacing the 0.4% gain in the benchmark S&P500 index.

Sale ended

This rival is JD.com (JD -4.15%)which lost its major American shareholder. In a regulatory filing, Walmart (WMT 0.94%) effectively revealed that he had sold his entire stake in JD.com, ending a nearly decade-long partnership. However, he did not say exactly how many shares he had sold or how much he had made from it.

The Bloomberg news agency, citing unidentified “people familiar with the matter,” wrote that Walmart’s proceeds from the sale were about $3.6 billion. The sale involved 144.5 million shares of the Chinese company at $24.95 a share. That price is 11% below JD.com’s Tuesday closing price. Not surprisingly, the stock fell by about that amount in the next trading session.

Walmart said in a statement that its move “allows us to focus on our strong operations in China for Walmart China and Sam’s Club and allocate capital to other priorities.” It did not provide further details about its plans in the country.

Fierce competition despite a large market

Competitors like the mighty Alibaba are likely a major factor in Walmart’s decision to effectively abandon JD.com. The company has struggled with such titans even though China is a huge consumer market with an economy that’s still growing — albeit at a relatively slow pace.