US retail giant Walmart lost about $10 billion in market value in early trade after it bought a 77 percent stake in India’s largest e-commerce company Flipkart at $16 billion, valuing the company at $21 billion dollars.
The retailer’s market cap stands at roughly $244 billion, as per NYSE data. Shares of the retailer dropped 4.09 percent at 8:00 pm IST.
The deal, which comes after almost two years of market speculation, gives Walmart an edge over its biggest rival Amazon as it gets a long-term upperhand in the domestic market. However, investors in the Arkansas-based retailer went bearish on the stock after the company said it expects to incur operating losses, with a drop in its fiscal 2019 earnings per share by 25 cents to 30 cents.
Walmart said the remainder of the business will be held by co-founder Binny Bansal, Tencent Holdings, Tiger Global Management and Microsoft, while SoftBank Group Corp and co-founder Sachin Bansal are stepping out, reported Bloomberg.
India is one of the most attractive retail markets in the world, given its size and growth rate. Our investment is an opportunity to partner with the company that is leading transformation of e-commerce in the market.Doug McMillon, President and Chief Executive Officer, Walmart
The deal is expected to close before the end of the second quarter, subject to regulatory approval.
(With inputs from Bloomberg)
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