Dada Nexus double downgraded to Sell at Citi after ‘suspicious practices’ found

Citi downgraded Dada Nexus to Sell from Buy with a price target of $1.80, down from $6, after the company issued a 6K filing that noted that “in the course of its routine internal audit, certain suspicious practices were identified that may cast doubt on certain revenues from the company’s online advertising and marketing services in 2023.” The news disclosed today follows the resignation of Dada’s CFO and Chairman on December 19, notes the firm, which says it believes that it is likely that the senior management departure “could be somewhat related.” The firm has “proactively” lowered its Q4 and 2024-25 estimates given the possible credibility impact from business partners and users and heightened uncertainty on the business growth outlook.