Chairman Colin Hwang Steps Down, $4 Billion in Assets Vanish

by Jo Youjin

Published 19 Mar.2021 15:15(KST)

Updated 19 Mar.2021 15:17(KST)

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Pinduoduo Stock Plummets, Assets Rapidly Decline

(Photo by BBC)

[Asia Economy Reporter Yujin Cho] The founder of Pinduoduo, China’s third-largest e-commerce company, Colin Huang, announced his resignation as chairman of the board, causing the stock price to plummet and his wealth to sharply decline.

According to Bloomberg on the 18th (local time), after Colin Huang announced his resignation as chairman of the board the previous day, Pinduoduo’s stock, listed on the US Nasdaq, fell sharply for two consecutive days, reducing the value of his holdings by about $4 billion. Colin Huang owns approximately 30% of Pinduoduo’s shares.

Colin Huang, who stepped down as CEO last July, announced on the 17th that he would also resign as chairman of the board. He stated that by stepping down from the chairman position, he plans to continue innovating in the food and biotechnology sectors.

Pinduoduo, specialized in agricultural product distribution, saw rapid revenue growth last year as demand for non-face-to-face services surged during the COVID-19 pandemic.

In a letter to shareholders that day, Colin Huang said, "To ensure the same valuation and growth rate 10 years from now, it is time to seek new growth drivers."

He also added that although he had planned to maintain the chairman position for one year after stepping down as CEO, he made the decision to quickly adapt to the changed market environment caused by COVID-19 and to maintain competitive advantage.

Colin Huang has delegated voting rights to the board as a shareholder and has committed not to sell his shares for three years.

With a net worth of $52.7 billion, Colin Huang ranks as the third richest person in China, following Zhong Shanshan, founder of Nongfu Spring, and Tencent chairman Ma Huateng, surpassing Alibaba Group’s Jack Ma as well.