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05/11/2023 - 01/08/2024


Complaint 01/10/24



The complaint alleges Dada Nexus misrepresented and concealed that: (1) its revenues from online advertising, marketing services, and operations and support costs were materially overstated; and (2) as a result, it would need to conduct an independent review to ascertain the financial impact and the scope of suspicious practices that overstated revenues and costs.

The truth began to emerge on Dec. 19, 2023, when Dada Nexus announced its Chairman of the Board Lijun Xin and CFO Beck Zhaoming Chen would be resigning immediately. The company claimed both Xin’s and Chen’s departures were due to “personal reasons.”

The true explanation for Xin’s and Chen’s abrupt departures became clear on Jan. 8, 2024, when Dada Nexus announced that it had identified “suspicious practices that may cast doubt on certain revenues from the Company’s online advertising and marketing services in 2023.”

The company also said that it “currently estimates that approximately RMB500 million of revenues from online advertising and marketing services and RMB500 million of operations and support costs may have been overstated, respectively, for the first three quarters of 2023.”

In addition, Dada Nexus added, “the revenue guidance previously provided by the Company for the fourth quarter and full year of 2023 should no longer be relied upon[.]”

This news drove the price of Dada Nexus shares crashing $1.445 lower (or down about 45%) on Jan. 8, 2024.

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