Shares of Pinduoduo (PDD) plunged over 11% during pre-market trading on Wednesday after the Chinese e-commerce platform reported fourth-quarter losses that were wider than what the street had anticipated.
On a reported basis, the company swung to a loss of RMB2.16 (32 cents) per ADS from a profit of RMB0.04 per ADS in the same quarter last year. Adjusted for one-time costs, the firm lost RMB1.72 (24 cents) per ADS in Q4, versus a profit of RMB0.04 last year.
Meanwhile, the top line soared 379% compared to the same quarter last year to a better-than-expected RMB5,653.9 million ($822.3 million), riding on its online marketing services.
Average monthly users almost doubled to $272.6 million, while the number of active buyers at the end of the quarter was 418.5 million, an increase of 71% year-over-year. GMV more-than-tripled during this period.
Tian Xu, Vice President of Finance, said, “The growth in our revenue is the result of the continued expansion of our buyer base and increasing user engagement, which translates to greater traffic and attractive advertising return on investments on our platform. To build on this momentum and increase mindshare with users, we will continue to invest strategically.”
The stock has gained 47% since its IPO in July last year. So far this year, the stock has gained 26%.