Walmart Inc. WMT has announced plans to sell its stake in the Chinese e-commerce giant and Alibaba-Rival JD.com Inc. JDwhich caused JD.com’s shares to plummet. The decision comes as Walmart shifts its focus to its own operations in China, according to the SEC filing.

What happened: Walmart is seeking to raise up to $3.74 billion by selling its stake in JD.com, Reuters reported, citing a person familiar with the matter. The American retail giant is reportedly offering 144.5 million American Depositary Shares at a price between $24.85 and $25.85. Morgan Stanley as a broker-dealer.

Following this announcement, JD.com shares fell 7.66% to $26.03 in premarket trading on Wednesday, while Walmart saw a minimal increase of 0.34% around the same time, according to Benzinga Pro.

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Although Walmart is JD.com’s largest shareholder, the company said it remains interested in a continued business relationship with JD.com.

Walmart, JD.com and Morgan Stanley have not yet responded to Benzinga’s requests for comment.

Why it is important: Walmart’s decision to sell its stake in JD.com follows its recent earnings surprise, which presented a great trading opportunity. The company beat expectations on both earnings per share ($0.67 vs. $0.64 expected) and revenue ($169.33 billion vs. $168.56 billion), sending the stock up about 8% since then.

Analysts highlighted market share gains and gross margin improvements in Walmart’s second-quarter earnings report, making Walmart one of the most attractive investments in retail.

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This story was created with Benzinga Neuro and edited by Pooja Rajkumari