Walmart shares tumble over 4%, market cap falls nearly $10 billion

Walmart’s shares took a beating hours after the retail giant announced $16 billion worth Flipkart deal.

Walmart shares slumped more than 4% in the morning trade on Wednesday wiping off nearly $10 billion from its market capitalisation, hours after the retail giant announced $16 billion worth Flipkart deal.

Walmart’s market capitalisation on Wednesday was more than $242 billion, which is way lower than Tuesday’s closing level. (Reuters)

The shares took a beating amid concerns that the deal could impact profits of Walmart. The American retail major’s shares fell over 4% on the New York Stock Exchange at around $82.13 apiece.

At this level, the market capitalisation was more than $242 billion, which is way lower than Tuesday’s closing level.

At Tuesday’s closing price of $85.74 per share, Walmart had a market capitalisation of little over $253 billion.

In the biggest deal in the fast-growing e-commerce space, Walmart today said it is buying 77% stake in Flipkart for about $16 billion and it would give the retailer access to Indian e-commerce market that is estimated to grow to $200 billion within a decade.

The deal values Flipkart at $20.8 billion.

“In FY20, as we look to accelerate growth in this important market, Walmart anticipates an EPS headwind in total of around $0.60 per share,” Walmart said in a release.