In a major embarrassment to Jack Ma and underwriters who engineered the largest IPO in history, shares of Alibaba plunged below its IPO price in pre-market trading Monday. The stock fell 3.04% to $68.18 on Friday, just a few cents higher than the IPO price of $68. Alibaba plunged another 5.54% to $64.40 in pre-market trading Monday.

Alibaba Group Holding Ltd Sinks Below Its IPO Price On China Woes

Shanghai benchmark index cracks 8.50%

The Chinese e-commerce giant went public in September 2014, raising a staggering $25 billion. Now bludgeoned IPO investors are hoping for someone to rescue them. A slowing Chinese economy and falling stock prices in mainland China have rattled investors. On Monday, the benchmark Shanghai Composite Index crashed 8.50% or 297.84 points to 3,209.91. The decline came even after the Chinese government’s efforts to stabilize the country’s stock market.

On business front too, Alibaba has failed to deliver on the Wall Street’s expectations. Earlier this month, the Hangzhou-based company posted its slowest revenue growth in three years. The company’s June quarter revenue came in at $3.26 billion, below the Wall Street expectations of $3.39 billion in revenue. It trapped Alibaba in an unusual situation where the company had to stage a $4 billion stock buyback within a year of listing. However, the buyback announcement did little to entice investors.

Alibaba’s upcoming lockup expiration may further hurt the stock

Underwriters including Credit Suisse, Morgan Stanley, Goldman Sachs and JPMorgan had netted more than $300 million from the company’s IPO. Alibaba’s underwhelming stock performance comes just weeks before a major lockup expiration. Alibaba’s largest investors including SoftBank, Yahoo and certain employees will be allowed to sell the stock. The lockup expiration usually drives down a stock, and Alibaba witnessed it during the March lockup expiration. Adding to investor worries, China has devalued its currency, guiding the yuan to the lowest point since 2012.

Alibaba is expanding in international markets such as Russia and India to keep growing. The company has hired former Goldman Sachs banker Michael Evans to oversee its international expansion. It would be interesting to see if Alibaba can maintain its torrential growth rate even as the Chinese economy cools.