Jack Ma, executive chairman of the Alibaba Group.
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The SEC is investigating the world’s largest e-commerce firm, Alibaba, over its accounting practices. Alibaba cited its delivery operation, Cainiao Netork, and Singles Day, a popular online shopping day, as targets of the probe. JD stock fell 3.8% intraday, perhaps in sympathy with Alibaba.
Alibaba said in a regulatory filing that the Securities and Exchange Commission had opened the probe “into whether there have been any violations of the federal securities laws”.
Per CNN Money, an Alibaba spokesperson was asked to comment and states that the disclosure of those financial details is “exactly the kind of robust and transparent information that will address the underlying issues in SEC’s inquiry”. Alibaba said it was told by the SEC that the request for information shouldn’t be interpreted as an indication by the agency that the company has violated securities laws.
Among other things, the SEC is seeking information into Alibaba’s accounting for its Cainiao logistics network and its reporting practices for Singles Day, a huge sales event in China.
And Kynikos Associates founder Jim Chanos, for one, is still betting against Alibaba, saying earlier this month that he’s doubtful about its cash flow and questions the company’s own metrics, according to CNBC. This pretext proved to be flimsy.
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Alibaba reported sales of $14.3 billion on Singles Day in 2015, up from $9.3 billion in 2014.
