Alibaba plunges off quarterly revenue miss
Shares of Alibaba sunk 9% on Thursday after the e-commerce giant reported revenue for the December quarter that missed Wall Street estimates.
For the quarter, Alibaba reported revenue of $4.2 billion, a 40% increase from the same time last year. However, it fell short of the $4.45 billion estimated by analysts.
Alibaba BABA also reported earnings of 81 cents, topping Wall Street estimates of 75 cents. Alibaba's monthly active users on mobile also increased to 265 million from 217 million during the last quarter. The company sales 42% of gross merchandise volume -- or total sales -- generated from mobile customers.
However, the big question for Alibaba is how they can create additional revenue from their growing mobile audience, says RBC Capital Markets analyst Mark Mahaney. "It's hard to monetize mobile as well as desktop usage, so it's dragging down their monetization rate."
Along with Alibaba shares, Yahoo's stock price sunk more than 5%. Yahoo owns a stake in Alibaba worth $40 billion, which the company says it will spin off into a separate entity.
Alibaba's December quarter includes sales from Singles Day, China's biggest shopping day of the year. Alibaba raked in a record $9 billion in sales during Singles Day.
During an earnings call with investors, Alibaba executive vice chairman Joe Tsai says the company is "deeply troubled" by a report from China's State Administration of Industry and Commerce claiming the company permitted the sales of fake goods on e-commerce platforms Taobao and Tmall.
"We believe this report was flawed and was based on arbitrary methodology," said Tsai.
Tsai also says Alibaba never requested regulators delay the report ahead of the launch of the company's initial public offering in the U.S. in September. The company plans to file a formal complaint accusing the SAIC's lead inspector of misconduct.
Tsai cited several examples of how Alibaba's attempts to thwart the sales of counterfeit goods, including periodic checks and data technology to help identify counterfeit sales and distribution.
Follow Brett Molina on Twitter: @brettmolina23.