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Alibaba Stock Slides After Q2 Revenue Miss As Beijing Crackdown Bites

Alibaba missed Street sales forecasts for the first time in two years last quarter as Beijing's ongoing crackdown on the tech sector continues to bite.

Alibaba Group Holding Limited  (BABA) - Get Free Report shares slumped lower Thursday after the China-based retailing giant posted softer-than-expected second quarter sales amid Beijing's broader crackdown on the tech sector.

Alibaba said diluted non-GAAP diluted earnings for its U.S.-listed shares for the three months ending in September, the group's fiscal second quarter, were pegged at $1.74 per share, a 38% decrease from the same period last year.

Group revenues, Alibaba said, rose 29% to 200.7 billion Chinese yuan, or $31.4 billion, compared to analysts' forecasts of a 205 billion tally. Revenues from its growing cloud division, however, rose 4.5% to just over 20 billion yuan.

Last week, Alibaba recorded its slowest 'Single's Day' sales growth on record, but still tallied an all-time high of around $85 billion from the eleven-day festival, with an estimated 900 million customers splurging on a record 290,000 different brands for sale.

“This quarter, Alibaba continued to firmly invest into our three strategic pillars of domestic consumption, globalization, and cloud computing to establish solid foundations for our long-term goal of sustainable growth in the future, said CEO Daniel Zhang. 

“Our global annual active consumers across the Alibaba Ecosystem reached approximately 1.24 billion, with a quarterly net increase of 62 million consumers, and we are on track to achieve our longer-term target of serving two billion consumers globally,” he added.

Alibaba's U.S.-listed shares ended the session 11.13% lower at $143.60 each, a move that extends the stock's year-to-date decline to around 37%.

Shares in the group have also been pressured by Beijing's broader crackdown on corporate profits and business practices and warning from rival Baidu  (BIDU) - Get Free Report over current quarter ad sales. 

China extended its crackdown on the tech industry in September with a warning to the country's biggest companies to stop blocking links to their rivals' platforms.

In a move many analysts interpreted as another shot across the bow of tech giants Alibaba and Tencent undefined, China's Ministry of Industry and Information Technology said it was "guiding relevant companies to carry out self-examination and rectification" of their long-standing practice of blocking access to rivals.

Earlier this year, Beijing regulators fined the group a record $2.8 billion as part of a far-reaching anti-monopoly probe by China’s State Administration for Market Regulation, which said some of its practices "infringe on the businesses of merchants on the platforms and the legitimate rights and interests of consumers."