Colin Huang's fortune took a dive by $14.1 billion on Monday due to a decline in shares of Temu's parent firm, PDD Holdings Inc. This was his largest one-day loss to date. With a $35.2 billion net worth, Huang is currently the fourth wealthiest person in China, according to the Bloomberg Billionaires Index.
The PDD founder, who on August 8 became the first tech tycoon to top China's wealth rankings in more than three years—displacing billionaire Zhong Shanshan, the owner of bottled water—has seen a sharp decline in wealth. Zhong, who has a $50 billion wealth, reclaimed the top position on Monday.
According to the bloomberg report, PDD issued a warning that sales growth will stall and revealed quarterly revenue that fell short of analyst projections. In a conference call with analysts following the earnings announcement, Chief Executive Officer Chen Lei stated multiple times that the company's present course was unsustainable, given the competition from ByteDance's TikTok and Alibaba Group Holding Ltd. for consumers on a tight budget. Its US-listed shares dropped by 29%, the highest amount ever.
In the upcoming years, management also tried to lower expectations regarding possible dividend payouts and share buybacks.
Chen said “We are facing intense competition on different fronts and also uncertainties from external factors.” “Therefore, our management team and I unanimously believe that it is not an appropriate time for share repurchases or dividends. And in the foreseeable years ahead, we also do not see such a need.”
Related News |
Meet Two Mega-Billionaires Who Have Been Friends For 30 Years: Know Their Names And Net Worth
PDD was founded by Huang in 2015 after launching some e-commerce and gaming ventures. The former Google engineer climbed up the ranks of the world's richest people in no time. His net worth peaked in early 2021 at $71.5 billion. He later resigned from the position of chief executive at PDD in 2020 and in 2021, left the board as chairman, as Beijing started repressing China's tech giants.
As global inflation surged, budget conscious customers got attracted to the e-commerce platform as it is known for selling dirt cheap products with whopping promotions. It grew outside of China under the brand name Temu and in no time became one of the most installed US apps after a striking debut in 2022. Since then, it challenged other Chinese online e-commerce giant Shein and even Amazon.com Inc. in some sections.
Employees, governments and suppliers expressed their frustration on the company. Rallies were carried out by hundreds of small merchants at PDD offices in Southern China this summer protesting about what they called unfair penalties imposed by the company. Lobbyists in the US are pushing for a $10 threshold for duty-free shipping, down from the current $800, while the European Union is working on a proposal to close an import tax loophole for cheap products purchased online.
Related News |
'Not Against E-Commerce Companies, But…': Piyush Goyal Clarifies Government's Stance