Looks like Flipkart can’t shake away from its recurring devaluation nightmare. The online marketplace has been marked down again by another mutual fund investor. This time the devaluation was not as fierce. T Rowe Price cut India’s largest etailer’s valuation by 4.4%. Compared to Morgan Stanley’s 38% devaluation of the company, this is much lower.
However, the devaluation has brought Flipkart’s value to around $9.9 billion. In 2015, the etailer’s valuation was about &415 billion. By December end, the valuation of each of its shares was reduced to $93.15 from $96.29 in September last year. In 2015, the value of each share was around $142.24 per share.
In an interview last year, Flipkart’s co-founder and then CEO, Binny Bansal, mentioned that the continuous markdowns were done by small firms and the effects were insignificant. But, these devaluations were just the reason why Flipkart’s CEO switched again.
Turns out devaluations are a big deal for the etailer after all.
Kalyan Krishnamurthy, a former executive at Tiger Global which is Flipkart’s largest investor, is the new CEO of the company. According to sources he is already making changes and working on keeping Flipkart ahead of Amazon, which appears to be performing pretty well.
Amazon is showing impressive sings of growth while Flipkart is beginning to show signs of failure. This latest devaluation is another blow to the company that makes stakeholders wonder if they are betting on the right horse. Hopefully, efforts by the etailer’s CEO should change things up for Flipkart. If not, it could be game over.
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