Dada Nexus Ltd ADR (DADA)

Dada Nexus Ltd ADR (DADA) stock dropped by 45.87% due to the company's announcement of suspicious practices uncovered during a routine audit, leading to doubts about its 2023 revenue and the withdrawal of its revenue guidance.

• Audit Findings and Impact: Dada Nexus, the parent company of JD.com, disclosed that during its routine internal audit, it identified certain suspicious practices that raised concerns regarding the reported revenues from the company's online advertising and marketing services for the year 2023. These findings indicated potential overstatements in revenue and operations and support costs, particularly for the first three quarters of 2023. The estimated overstatement amounted to approximately RMB500 million for both revenues and operations and support costs.
• Revenue Guidance Withdrawal: As a result of these findings, Dada Nexus stated that its previously provided revenue guidance for the fourth quarter of 2023 and the full year of 2023 should no longer be relied upon by investors until further notice.
• Independent Review Initiated: In response to the audit findings, the audit committee of the company's board decided to conduct an independent review to assess the financial impact and the extent of the suspicious practices. This action was deemed to be in the best interest of the company and its shareholders. The combination of these factors triggered a significant decline in Dada Nexus's stock price, with investors expressing concerns over the potential financial impact and uncertainty surrounding the company's revenue and financial reporting.

Dada Nexus shares declined by 10.61% after its first-half financial report showed a net loss of CNY 509.18 million.

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