Alibaba Group acquired $56.2 million of stock in US online retailer Zulily Inc.
According to a regulatory filing, Alibaba spent millions of dollars buying Zulily stock as its shares declined in recent days, including five transactions from May 6 to May 8, at prices ranging from $10.75 to $12.26.
The Chinese E-commerce giant now owns 11.5 million shares of Seattle-based Zulily, equal to a 9.3 percent stake in the company. Its holdings in Zulily were worth $152.9 million at Friday’s closing price of $13.30.
Jack Ma, Alibaba CEO, has said that he’d like to see the company expand operations outside China, given the lack of growth in the region. The company has made a number of investments in the US over the past year as part of diversification plan.
Alibaba Executive Vice Chairman Joe Tsai told WSJ in November:
“The key issue is whether we are going to have something in the U.S. market that will really target U.S. consumers.
“We think in the long run that’s an interesting market to us. But today, our focus is very much on cross-border activities.”
Someone familiar with the matter told The Wall Street Journal that Alibaba isn’t looking to outright acquire Zulily.
According to Bloomberg, in an email Jennifer Kuperman, vice president of international corporate affairs at Alibaba, said:
“Alibaba continues to focus on making investments in forward-thinking, innovative entrepreneurs that are developing leading products and technologies.
“The Zulily team has a compelling vision for the future that is consistent with our investment philosophy.”
Darrell Cavens, Zulily chief executive officer, said:
“We have great respect for the team at Alibaba and all that they have built,”
Since Alibaba went public last September – when it raised a record $25 billion – shares of the company have increased 28 percent.
About Zulily Inc.
Zulily is a retailer that primarily sells clothing, home décor, toys, and gifts.
It went public in November 2013 at $22 a share. In early 2014, shares of the company surged to above $70.
However, this year its stock has plunged because of disappointing quarterly reports and lackluster sales growth.
On a positive note, at the end of March the retailer said that 5 million customers made at least one purchase in the previous year, up 35 percent from the year before.
Over half of purchases made at Zulily are on mobile devices.
