Missfresh Responds to Rumors of Financing Failure and Company Dissolution
On the afternoon of July 28, many domestic media outlets reported that the recording of a staff meeting within Chinese grocery e-commerce Missfresh was leaked on the Internet. According to the recording, one executive said that the previously announced strategic investment with Shanxi Donghui Group is still in the process of negotiation. Although it has been announced and filed with the U.S. Securities and Exchange Commission, the financing has not yet been closed. This has led to the delay of some employees’ wages.
The executive also said that the working hours of most employees will end on July 28, leaving only a few staff to take over the company’s business and handle follow-up matters. The housing accumulation fund and social insurance of the employees who leave the job will still be paid by the company for the month of July but will be paid by the employees themselves in August. When an employee asked when the June and July salaries would be paid, the HR staff replied, “I can’t answer now.”
In addition to the delayed wages of employees, there are some employees who broke the news on the Internet, saying that “the company was dissolved in situ, our internal communication software Feishu was deactivated”, and the company’s suppliers also had huge amounts left in arrears.
Regarding the rumors of dissolution, Missfresh responded on the afternoon of July 28 that under the larger goal of achieving profit, the company adjusted its business and organization. Next-day delivery, intelligent fresh market, retail cloud and other businesses will not be affected. Due to the business adjustment, some employees have left their jobs and the company is actively seeking all possible solutions to maximize the protection of employees’ rights and interests.
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According to the company’s financial report, its net loss was as high as 2.232 billion yuan ($330.9 million) in 2018, 2.909 billion yuan in 2019 and 1.649 billion yuan in 2020. It is estimated that the annual loss in 2021 will be 3.737 billion yuan to 3.767 billion yuan, which is equivalent to an average monthly loss of more than 300 million yuan.
In May this year, the Nasdaq issued a warning letter, saying that Missfresh “does not meet the requirements for continued listing”. In June, the stock exchange issued a delisting notice letter to the company, saying that the company’s share price has been lower than the $1 threshold for compliance standards for 30 consecutive trading days, and it is required to meet the minimum valuation requirements within 180 days.
As of the close of July 27, EST, Missfresh’s share price fell 5.8% to $0.236, with a total market value of $55 million.