Why Pinduoduo's Brutal Sell-Off Could Be an Opportunity

Sometimes, you have to spend money to make money. That's certainly the mantra of Zheng Huang, the CEO of the Chinese e-commerce platform Pinduoduo (NASDAQ: PDD). The company's shares had a massive run this year -- that is, up until its third-quarter earnings report this week.

Pinduoduo went public back in July 2018 at $19 per share, with the promise of a unique e-commerce model. Initially targeting lower-tier Chinese cities and rural customers, it offered price-sensitive shopers large discounts on an array of goods by allowing them to team up online and buy in bulk. The social aspect of Pinduoduo was a unique feature of the e-commerce experience.

Thanks to the company's explosive growth this year, Pinduoduo's shares had doubled before the recent third-quarter earnings report. While those results weren't quite up to analyst expectations, the 23% sell-off afterward may have opened up an opportunity for those not yet in this exciting stock.

Continue reading

Source Fool.com