Why Dada Nexus Stock Rocketed Almost 22% Higher on Tuesday

Chinese delivery company Dada Nexus ( DADA 21.70% ) was the subject of some rather impactful news on Tuesday. Its former strategic investor sold all of its shares in the delivery company to one of Dada's peers in a move that excited investors.

In this market, they piled into Dada's American depositary shares (ADS) to the point where the stock closed the day nearly 22% higher. Making the company a particular outlier was the fact that the S&P 500 index traded flat across that session. American sell-off in China In a regulatory filing, Dada revealed that a subsidiary of U.



S. retail giant Walmart has sold its entire stake in the Chinese company. All told, the Walmart unit, Global Pinnacle Corporation, divested nearly 87.

5 million of Dada's ordinary shares and slightly under 1.9 million of its ADS. The buyer was Chinese online retailer JD.

com . Walmart's stake comprised slightly over 9% of Dada's equity. With the shift in ownership, JD.

com, already a major Dada shareholder, increased its majority stake in the company to more than 63%. Meanwhile, the CEO of the Walmart China division, Christina Zhu, relinquished her seat on Dada's Board of Directors, effective immediately. Deja vu all over again Speaking of JD.

com, it and Walmart made the news in August when the latter sold out of a similarly proportioned stake in JD.com . Taken together, the two moves show a definitive change in strategy with the Asian market for the American retailer; now that it's established as a go-to retailer in that country, it likely doesn't feel the need to hold positions in sector peers and rivals.

Meanwhile, JD.com's purchase strongly indicates its confidence in Dada's potential..