Please ensure Javascript is enabled for purposes of website accessibility

CEO Richard Liu Is Integral to JD.com

By Motley Fool Staff - Sep 18, 2018 at 11:06AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company's fortunes are deeply linked to its founder and controlling shareholder.

In this segment from Motley Fool Money, host Chris Hill and senior analysts Andy Cross, Matt Argersinger, and Ron Gross discuss the still-evolving story that Richard Liu, CEO and founder of JD.com (JD 1.55%), was arrested recently in Minneapolis on suspicion of rape. No charges were filed and Liu was released after several hours in custody. The police investigation is ongoing. Shareholders in the largest direct-to-consumer retailer in China need to know that "an investment in JD.com is very much an investment in CEO and founder Richard Liu."

A full transcript follows the video.

This video was recorded on Sept. 7, 2018.

Chris Hill: Last week in Minneapolis, JD.com founder and CEO Richard Liu was arrested after an allegation of rape. He was later released and is back in China. The company has said Liu is willing to cooperate with authorities further if asked. Matt, this is an interesting story on several levels. What I'm struck by is the conflicting reports we're getting, both from U.S. media and from the media in China. As of this taping right now, the investigation is still ongoing.

Matt Argersinger: It's still ongoing, and I think it's something that, the allegations have to be taken very seriously. I think, as Andy just pointed out about Tesla, an investment in JD.com is very much an investment in CEO and founder Richard Liu. He's the founder, he built the business basically from a small electronics store 20 years ago. He's built it into the largest direct-to-consumer retailer in China. He's a billionaire. He's also somewhat of a celebrity figure. He owns 16% of the stock, but also controls 80% of JD.com's voting power, to the point where the board of directors at JD really can't make decisions without Richard Liu involved.

These allegations are serious. We don't know the facts. It sounds, from what JD has said, like there aren't any charges coming. If that is the case, and that does prove out, the stock is likely going to rally, because it's been hit pretty hard after this news. We'll have to see. I worry, if there's even a sliver of credibility to the allegations -- it's not just JD's reputation or Richard Liu's reputation. You have companies like Alphabet, Walmart, Tencent, who have taken major stakes in this business and have partnered with JD.com in a number of long-term initiatives. They're definitely not going to stake their reputation on what happens with JD.com.

Hill: Well, and on top of all that, he doesn't really have a second in command, does he?

Argersinger: No, he doesn't.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

JD.com, Inc. Stock Quote
JD.com, Inc.
JD
$53.54 (1.55%) $0.82

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
344%
 
S&P 500 Returns
120%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.