Missfresh Limited (NASDAQ: MF) is one of those dead dogs of a company that litters the floor of the stock exchange. A once bright idea perhaps, one that didn't work out. The company failed in its task and really we're just waiting for the guy with the broom to come around and clean up the mess. If that all sounds a little too harsh it's not, for Missfresh really hasn't got much going for it. If we look at the investor site we find that the last accounts are only for Q3 2021. The last notice there is from Dec 2022 concerning a NASDAQ notice that they're in breach of the $1 minimum bid price. The most recent Edgar (ie, SEC) filing is that they'll be late filing their accounts. True, there is some weirdness about Blackrock owning 4.5% of the equity. But that sounds much more like it not being worth the bother of selling out of the position than anything else.
Don't forget that even at this elevated price Missfresh has a market capitalisation of only $4.3 million. So it wouldn't take much buying to create a ramp of the stock. And as to the actual operating business well, that's pretty much been dead since August 2022. When they closed down the division that created 85% of their revenue. Oh, and a promised capital injection never turned up. The “problematic and highly unprofitable business model” burned through $1.8 billion of investor cash before that happened. With implications for China's tech sector of course.
Missfresh stock price from NASDAQThe problem here is that there isn't really a business left inside Missfresh. They were trying to do the last mile of online delivery. Low volume, low value deliveries immediately - well, 15 to 30 minutes. That's a sector that no one has really worked out how to do, anywhere. And they didn't in China either. What made it cost so much is that they tried to own the delivery points rather than just using local convenience stores as their sources.
Well, OK, so there was an attempt to build a business, it failed. It's not filing accounts, it's in breach of NASDAQ rules, it's a big enough failure that even the WSJ has taken note. So, why the price jump? The answer being - probably - that it's just one of those things and soon it won't be. For there isn't anything here other than a quotation which people can manipulate through aggressive trading. Much fun, of course, but such price moves do have a tendency to revert to their starting point pretty swiftly.
