Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Vipshop Sinks as Citron’s Post Predicts ‘Major Decline’

Don't Miss Out —
Follow us on:

Aug. 13 (Bloomberg) -- Vipshop Holdings Ltd., a Chinese online fashion retailer, tumbled in New York after Citron Research wrote in a Twitter post that the number of users on the website declined and shares may slump more than 50 percent.

Vipshop traffic “falls off a cliff,” Citron posted on Twitter today, attaching a note from Macquarie Group Ltd., which cited data from iResearch saying users fell 20 percent in June from a month earlier. “Stock should go back to 20’s easy. Scary for shareholders. Major decline,” short-seller Citron said.

American depositary receipts of Guangzhou-based Vipshop plunged 6.8 percent to $45.36 at the close in New York, the biggest retreat since June 20. Trading volume was almost triple the average of the past 90 days.

Vipshop, which sells branded fashion online at discounts, surged 154 percent this year, compared with a 1.8 percent decline on the Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S. Deutsche Bank AG cut its recommendation for the stock to hold from buy on May 27, citing intensifying competition in the Internet flash sales market.

“Given the good run Vipshop had this year, investors would sell for profit on any negative news,” Jeff Papp, a senior analyst at Oberweis Asset Management Inc., which manages $700 million of assets, said by phone from Lisle, Illinois. “The monthly traffic growth figure cited by Citron is just one piece of information from a data provider without mentioning the company fundamentals. It’s hard to extrapolate anything from just one-month data which accuracy we aren’t sure about.”

Jeremy Peruski at ICR Inc., Vipshop’s external investor relations manager, couldn’t be reached by phone. Andrew Left, the founder of Citron Research, confirmed the post by phone, adding that he started a short position on Vipshop.

Short sellers sell securities they don’t own to buy them later at a lower price.

To contact the reporter on this story: Belinda Cao in New York at lcao4@bloomberg.net

To contact the editor responsible for this story: Tal Barak Harif at tbarak@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.