Short guerrilla “encirclement and suppression” Rui Xing.
Editor’s note: This article comes from the WeChat public account “Tech Planet” (ID: tech618) , Author Zhou Xiaoqi.
On May 17, 2019, Ruixing Coffee, which was only 18 months old, ushered in a highlight moment. On the same day, Ruixing landed on Nasdaq and set an issue price of $ 17. At the close, it rose by 20% to $ 20.38, with a market value of $ 4.831 billion.
The rushing Ruixing told the tempting coffee story in the capital market, but not everyone believes this story.
“I often watch Stocktwits (overseas version of Snowball) and find that foreign investors are all optimistic about Ruixing, but domestic investors are generally bearish on Ruixing,” said investor Yan Feng.
On January 31, 2020, the well-known short-selling agency muddled water broke the beautiful vision of Ruixing Coffee by foreign investors.
On the same day, Muddy Water released an 89-page short report, accusing Ruixing of financial fraud and exaggerating important data such as sales at major stores. He believes that Ruixing ’s average sales per store increased by 69% in the third quarter of 2019 In the fourth quarter, it increased by 88%.
In order to verify the content of the report, the author hired 92 full-time and 1418 part-time investigators, collected more than 25,000 small notes, recorded 10,000 hours of store video, and included a large number of internal WeChat chat screenshots.
Screenshot of WeChat in Muddy Water Report
According to a number of interviewees, Tech Planet (WeChat ID: tech618) said that after the muddy water issued a short report, the rate for securities firms to lend Ruixing stock soared from 2% to 50% annually Demand for Ruixing stocks in the market is rising.
The muddy water has become the fuse for breaking the Ruixing bubble, and investors who smell the benefits all want to take this opportunity to take a slice of the soup, but the short-seller has long been staring at Ruixing.
According to several investors, Ruixing Coffee just went public, and the “hunting” operation of shorting Ruixing Coffee has already begun.
Weirdly found that: fewer people, fewer sales increase
In December 2019, Yan Feng made a breakthrough in the exhaustive adjustment plan for “Daily Cup of Ruixing Coffee”. He found that the number of orders for Ruixing’s coffee stores increased significantly, with an increase of 20% to 30%.
“I counted the data for one month. Originally this store sold about 300 cups of coffee per day, but the sales in December were stable at more than 350 cups.” Yan Feng introduced to Tech Planet (WeChat ID: tech618), “It’s too weird. The Ruixing store has a very small number of people, but sales are rising.”
In order to verify the judgment of Ruixing ’s fraud, starting in November, he will select one of the three Ruixing coffee stores under investigation every day at a fixed time, buy a cup of Ruixing coffee, and buy at least three in the same store within a week. Cup coffee, so as to roughly count the monthly sales data of a single store.
He told Tech Planet that at that time he did n’t know that Ruixing Coffee would skip orders and boast the order quantity at the main store. After seeing the report of muddy water, he knew that this was a means of fraudulent fraud.
Report issued by muddy water, showing false jumps
In fact, as early as Ruixing just went public, Yan Feng, as a practitioner in related industries, had vaguely noticed that the data of Ruixing Coffee ’s financial report was untrue.
On August 14, 2019, Ruixing Coffee released its first financial report after its listing. The data is eye-catching.
The financial report shows that Ruixing Coffee ’s total revenue in the second quarter was 909.1 million yuan, an increase of 648.2% year-on-year; net product revenue was 870 million, an increase of 698.4% year-on-year, and the average monthly sales of goods was 27.6 million; cumulative transaction users From 2.9 million in the same period last year to 22.8 million.
“The first financial report data is very problematic and was obviously made. At that time, Ruixing only talked about total data such as revenue and number of users, but avoided specific data such as sales,” Yan Feng said.
Yan Feng ’s first reaction was that Ruixing Coffee was suspected of financial fraud. He then read a lot of relevant materials and found that Ruixing Coffee ’s style of play was very characteristic of the Chinese department, which made him more convinced of his judgment.
“The Chinese Department is too good at playing capital. All the information on the Internet is related to it,” Yan Feng said. <