What: Shares of JD.com (NASDAQ:JD) slumped on Monday following a turbulent day for the Chinese stock exchanges. At 3 p.m. EST Monday, the stock was down about 10%.
So what: Due in part to weak manufacturing data, Chinese stocks slumped by 7% Monday before authorities halted trading for the rest of the day. This, in turn, drove a steep drop in U.S. stocks, with U.S.-listed Chinese companies heavily underperforming the indices. JD.com was one of the hardest hit, but stocks including Sohu (NASDAQ:SOHU) and VipShop (NYSE:VIPS) declined as well. Sohu was down about 5% at 3 p.m. EST, and VipShop had slumped 8%.
This isn't the first time this year that a volatile Chinese stock market has pushed shares of JD.com lower. In June, Chinese stock markets began to crash, with the Shanghai Composite Index falling by more than 40% in a few short months. Shares of JD.com crashed along with the Chinese stock market, although the stock had partially recovered before Monday's decline.
Now what: For long-term investors, what matters most is the long-term prospects of the company. For JD.com, that depends on the strength of the Chinese economy, and given the recent stock market turbulence in China, there's certainly a tremendous amount of uncertainty. One thing is for certain: Investors without the stomach for violent stock price swings should stay far away from JD.com.