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US retail giant Walmart lost about $10 billion in market value in early trade after it bought a 77 percent stake in India’s largest e-commerce company Flipkart at $16 billion, valuing the company at $21 billion dollars.
The retailer’s market cap stands at roughly $244 billion, as per NYSE data. Shares of the retailer dropped 4.09 percent at 8:00 pm IST.
The deal, which comes after almost two years of market speculation, gives Walmart an edge over its biggest rival Amazon as it gets a long-term upperhand in the domestic market. However, investors in the Arkansas-based retailer went bearish on the stock after the company said it expects to incur operating losses, with a drop in its fiscal 2019 earnings per share by 25 cents to 30 cents.
Walmart said the remainder of the business will be held by co-founder Binny Bansal, Tencent Holdings, Tiger Global Management and Microsoft, while SoftBank Group Corp and co-founder Sachin Bansal are stepping out, reported Bloomberg.
The deal is expected to close before the end of the second quarter, subject to regulatory approval.
(With inputs from Bloomberg)
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