After Luckin short-selling spree, what’s next for Chinese stocks?

Luckin Coffee’s sudden admission of financial fraud has touched off a short-selling bonanza for US-listed Chinese stocks. In the weeks since it admitted to fabricating over half of its claimed revenue, a short-seller firm called Wolfpack Research made similar accusations against iQiyi, while TAL Education has admitted to smaller-scale inflated figures.

What does this mean for everyone else? How badly will these cases affect the reputation of other US-listed Chinese stocks? To answer these questions, TechNode has analyzed 31 US-listed Chinese tech companies.

In US markets, e-commerce platforms are the heavyweights. Alibaba alone is eight times bigger than runner-up JD, and you don’t see anything but e-commerce until Netease at number four. You might notice the absence of Tencent—it’s listed in Hong Kong.

Share prices of e-commerce and edtech startups have boomed as more people are relying on online services during the Covid-19 pandemic.

Whilst Luckin Coffee has lost all of its value, GSX Education has almost doubled its market cap in the last year. GSX has been accused of fraud twice. (Image credit; TechNode/Eliza Gkritsi, Shaun Ee).

Despite short-sellers’ fraud accusations, edtech startup GSX Education has almost doubled its market cap in the last year to $4.6 billion. TAL Education has also seen a 48% increase whilst streaming site Bilibili has gained 65% or $3.6 billion.

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