![]() ![]() When it comes to growth, digital hustlers have grey areas they can exploit. When predicted growth falls short, falsified revenue and user growth keep stock prices on an upward trend and can help evade questions around sketchy business models, elusive profitability, and evaporating cash reserves. This leeway suits hustlers well.īut even in tech, eventually you have to come up with some numbers. That breeds comfort with these stocks’ high-risk, high-reward growth profiles-scale first, profits later. Investors know technology and internet stocks have outperformed the market. Mobile gaming company Cheetah Mobile and online tuition provider GSX are staring down the barrel of shareholder lawsuits about inflated user numbers and sham revenues. In both instances, fessed-up fraud involves inflated online purchases. ![]() Take the recent fraud admissions from Luckin Coffee and TAL Education Group, respectively a digital-first coffee vendor and an education provider with a swag of online-only sub-brands. Instead, these hustlers involve digital economy actors like digital advertisers, online education providers, and consumer commerce companies. “New China Hustles” don’t involve manufacturers, agricultural producers, or mining companies engaged in the physical economy. He has the financial sense not to hold or short stocks of any of the companies mentioned in this article. Michael Norris is a TechNode Contributor and Research and Strategy Manager at Agenc圜hina.
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