Chinese e-commerce giant Alibaba Group (BABA) has taken a stake of more than 9% in US online retailer Zulily Inc. (ZU), according to regulatory papers.
In a filing with the SEC late Friday, Alibaba said it had bought a block of about 4.8 million Zulily Class A shares on May 6 at a cost of $56.2 million. Added to an earlier undisclosed 5% stake, or 6,687,575 shares it already owned, Alibaba, which through this acquisition will get much needed intelligence and understanding of the US online market, has invested about $150 million to acquire almost 10% of the Seattle-based online retailer of clothing and homewares. Jack Ma’s company now owns about a sixth of Zulily’s Class A stock, which as of market close on Friday had a market cap of $1.64 billion.
Five-year-old Zulily went public in November 2013 at $22 a share. Its shares are down 43% year-to-date as sales growth decelerates. Earlier this week, the company cut its sales forecast for 2015.
Zulily’s shares closed at $13.30 on Friday, a decline of 80% from about $70 a share in early 2014.