On January 8th, JD.com, Inc announced on The Stock Exchange of Hong Kong that its subsidiary Dada Nexus Limited (Dada) had discovered some suspicious activities during a routine internal audit. These activities may raise doubts about Dada’s online marketing service revenue and operating support costs for the first three quarters of 2023. Upon this news, Dada’s stock price plummeted by 45.87% in the US market on Monday, while JD.com‘s stock dropped by 2.7%. On the 9th, JD.com‘s stock price in the Hong Kong market experienced slight fluctuations with an amplitude of around 2%.
Dada has announced in a statement during routine internal auditing that suspicious activities have been discovered, raising doubts about the company’s online advertising and marketing service revenue for 2023. Dada stated that based on preliminary assessment, the company estimates that the revenue from online advertising and marketing services of approximately 500 million yuan (approximatly ＄70 million) and operating costs of 500 million yuan for the first three quarters of 2023 may have been overstated. The Audit Committee is hiring independent professional advisors to assist with this matter, including a non-company auditor legal accounting firm and an international law firm. The company will provide timely updates on the independent review according to applicable rules and regulations.
Dada is an instant delivery and retail platform under JD.com. It was established in Shanghai in 2014 and went public on the NASDAQ stock exchange in June 2020. The Company operates JD-Daojia (“JDDJ”), one of China’s largest local on-demand retail platforms for retailers and brand owners, and Dada Now, a leading local on-demand delivery platform open to merchants and individual senders across various industries and product categories. Dada is one of the key sectors for JD.com‘s business expansion, holding approximately 53% of Dada’s circulating shares as of the end of last year.
SEE ALSO: Dada Group Q1 2023 Total Revenue Reaches $370 Million
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