The stock price of Wal-Mart Stores, Inc (WMT) has gone down by over 1% today till the late morning trading session. Since last Friday, the stock price of Walmart has gone down by just about 2%. The stock closed at $71.79 on Wednesday.
The Arkansas based company is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores and grocery stores. The company was founded by Sam Walton in 1962 and incorporated on October 31, 1969. As of July 31, 2016, Walmart has 11,539 stores and clubs in 28 countries, under a total of 63 banners. The company operates under the Walmart name in the United States and Canada. It operates as Walmart de México y Centroamérica in Mexico, as Asda in the United Kingdom, as Seiyu in Japan, and as Best Price in India. It has wholly owned operations in Argentina, Brazil, and Canada. It also owns and operates the Sam’s Club retail warehouses.
Meanwhile, Walmart is in discussions with Flipkart Ltd., India’s largest e-commerce company by sales, about investing in the startup, according to a person familiar with the situation. If the two sides agree on some way to join forces, Wal-Mart could gain a better foothold in Asia’s third-largest economy, a market that has long eluded the world’s largest retailer. It would also give Flipkart much-needed capital and a powerful partner in its battle against Amazon.com Inc. to become the dominant online retailer of India. Flipkart has been valued at about $11.5 billion, media reported last month, citing a US regulatory filing from investor Valic, a division of American International Group Inc. The company was valued at as much as $15 billion earlier this year, but cut-throat competition, reduced private funding, and elusive profitability is putting pressure on e-commerce players in India.
One of the sources said the U.S. retailer was looking to invest between $750 million and $1 billion in Flipkart, but the final value and size of the stake would depend on the outcome of talks about the Indian company’s overall valuation.
The deal has potential benefits for Wal-Mart too. Beyond any eventual financial return on its investment, Wal-Mart would gain exposure to India’s expanding e-commerce market and have the opportunity to challenge Amazon on more equal footing than the U.S.
Our analysts have given a “BUY” rating to Walmart’ stock. Despite today’s fall, there is a significant chance of this stock going up after the Flipkart stake buy in talks. Although it shows great potential, however due to the fluctuation, this is not the stock where you want to go all in on.