VIPS Stock Price Fell 2.36%: Why It Happened

By Amit Chowdhry ● Mar 28, 2021
  • The stock price of Vipshop Holdings Ltd (NYSE: VIPS) fell by 2.36% on Friday, March 26. This is why it happened.

The stock price of Vipshop Holdings Ltd (NYSE: VIPS) – an online discount retailer for various brands in China – fell by 2.36% as it went from a previous close of $31.94 to $31.19 on Friday, March 26. It seems like investors were responding to a couple of catalysts.

The first catalyst was that large blocks of Vipshop was reportedly being offered by Goldman Sachs. It is believed that the large blocks were in response to a margin call associated with Archegos Capital. This seems to be the same catalyst that drove down the stock prices of Viacom and Discovery Communications on Friday as well.

Another catalyst that brought the stock price down appears to be a decision by the Securities and Exchange Commission (SEC) adopting measures that would potentially remove foreign companies off of American stock exchanges unless they comply with U.S. auditing standards. The Holding Foreign Companies Accountable Act — which was signed into law by the former President Trump in December — focuses on removing Chinese companies from U.S. exchanges if they do not comply with the auditing standards for at least 3 consecutive years.

And the rules also require companies to prove to the SEC that they are not owned or controlled by an entity of a foreign government. Plus they have to name any board members who are Chinese Communist Party officials.

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.