Shares of Alibaba (BABA 0.80%) were sliding today as the Chinese tech giant posted its slowest growth in its publicly traded history. The company is struggling with a number of new regulations from the Chinese government.
Alibaba stock was down 3.2% as of 10:57 a.m. ET after trading as low as 8.8% earlier in the session.
Revenue for the company, whose main business is e-commerce, rose 9.7% to $38.1 billion but that was well below its historical growth rate, which has averaged around 40% since it went public in 2014. Revenue in the quarter was also short of estimates at $38.9 billion.
Alibaba's customer base continued to grow as well, with the company adding 43 million customers in the quarter to reach a total of 1.28 billion. Its China commerce segment, which makes up the majority of its revenue, grew just 7% to $27 billion Management cited "slowing market conditions" and competition as the main reasons for the weak growth.
The company also took a $3.9 billion goodwill impairment charge in its digital media and entertainment segment, a likely response to government orders to divest some of its media assets. Adjusting for that charge, operating income fell by 34% to $5.1 billion. Management said the decline was due to investments in growth initiatives.
On a per-share basis, the company turned in a profit of $2.65, down 23% from the year-ago quarter, and ahead of estimates at $2.55.
Alibaba's results confirmed many of the biggest worries about the stock, which is that government actions have fundamentally changed the company, restraining its growth and cutting into profits. It's also added a high degree of uncertainty to Alibaba's future.
The good news is that those concerns seem to be reflected in the stock price, which is down two-thirds from its all-time high. The company has begun a share repurchase program to take advantage of the sell-off, buying $1.4 billion of stock in the most recent quarter, but the stock is unlikely to make a comeback until the regulatory environment improves.