Chinese retailer MINISO slumps over 11% in Hong Kong after Blue Orca Capital issued short report
Chinese retailer MINISO slumps over 11% in Hong Kong after Blue Orca Capital issued short report

Chinese retailer MINISO slumps over 11% in Hong Kong after Blue Orca Capital issued short report

 

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Chinese retailer MINISO Group is slumping more than 11% in Hong Kong after Blue Orca Capital issued a short report regarding he company’s operations.

Blue Orca Capital said that “MINISO Lies about its Core Business Model. MINISO’s value proposition to investors is that it allegedly operates an asset-light, high-margin independent franchise model. Supposedly, this enables the Company to expand quickly while minimizing upfront capital costs. In theory, this also allows MINISO to generate high margins without the operating expenses and complexity which drag down profitability at traditional retailers. We think that this foundational narrative is a lie.”

In addition, Blue Orca alleged that IPO proceeds were siphoned by Chairman through a crooked headquarters deal.”

Shareholder rights law firm Johnson Fistel, LLP said on Tuesday that it’s investigating whether MINISO Group any of its executive officers, or others violated securities laws by misrepresenting or failing to timely disclose material, adverse information to investors. The investigation focus on investors’ losses and whether they may be recovered under the federal securities laws, the law firm said.

Separately, stockholder rights firm Bragar Eagel & Squire, P.C. also said it’s investigating potential claims against MINISO Group on behalf of MINISO stockholders and the investigation concerns whether MINISO has violated the federal securities laws and/or engaged in other unlawful business practices.