Colin Huang, the founder and former chairman of Chinese e-commerce business PDD Holdings, saw his net worth drop by about $14 billion on Monday as the company’s shares plunged almost 30% due to dismal second quarter revenues.
Huang, a significant shareholder in PDD, lost about 28% of his estimated net worth to $35.3 billion on Monday.
The adjustment dropped him down Forbes’ real-time billionaires list to No. 50 globally and No. 4 in China, trailing Zhong Shanshan ($49.9 billion), Zhang Yiming ($43.4 billion), and Ma Huateng ($40.7 billion).
PDD’s stock was trading at $97.35 soon after 12 p.m. EST, down more than 30% and by far its lowest price in 2024.
PDD owns prominent online marketplace Temu, and its stock has risen about 22% in the last year.
Monday’s drop comes after the corporation failed earnings and revenue projections for the second quarter.
PDD Holdings reported diluted earnings of 23.24 yuan ($3.20) per share and sales of 97.06 billion yuan ($13.64 billion), lower than analysts’ forecasts of 100.17 yuan ($14.1 billion). Operating profit more than quadrupled from the same quarter last year, rising from $1.78 billion to $4.4 billion. PDD’s vice president of finance, Jun Liu, stated that the company’s sales growth rate has slowed and is expected to continue due to “intensified competition and external challenges.” Lei Chen, CEO of PDD, stated that the company is willing to make “short-term sacrifices” to invest in the business.
PDD is not the only online marketplace in China that has announced failed expectations due to the country’s economic crisis, which includes high unemployment rates and declining household incomes. Alibaba, a similar online marketplace that sells ultra-discounted items, reported a 28.77% drop in net income in June, while JD.Com missed its revenue projections for the same month.In July, CNBC reported that young consumers are saving more than previous generations. The idea of setting ultra-low spending limits has become a viral social media fad called “revenge saving,” fueled by the country’s faltering economy.
Huang created Pinduoduo, now PDD Holdings, in 2015. His net worth has risen from an expected $13.5 billion in 2019 to a peak of $55.3 billion in 2021, with an average of $38.9 billion so far this year. He served as chairman of the corporation until 2021 and remains a significant stakeholder. PDD established Temu, an online budget marketplace whose main competitor is Shein, in 2022. Huang also launched Xinyoudi, an online gaming startup, and the e-commerce site Ouku.com.