Bulletins

HE Holdings is 'a substantial fraud,' Muddy Waters Research finds

Muddy Waters Research believes HE Holdings engages in "substantial" and "systematic fraud."

An illustration of a generic stock chart

Muddy Waters found that HE Holdings inflated its new home sales gross transaction volume by more than 126%.

Image: Greg Ory, Ataur Rahman and Protocol

Muddy Waters Research said Thursday it has taken a short position on HE Holdings, a major Chinese online platform for housing transactions and services, because the short-seller believes the company is “a substantial fraud like Luckin Coffee.”

Muddy Waters said it found that HE Holdings, which trades on the New York Stock Exchange as BEKE, inflated its new home sales GTV (gross transaction volume) by more than 126% and that its commission revenues by up to 96%. Additionally, Muddy Waters found “massive discrepancies” between transaction volumes, store count and agent count between the company's SEC filings and Muddy Waters’ own due-diligence investigation.

HE Holdings defended itself in an emergency statement, asserting that the company can guarantee “the authenticity and standardization” of its financial data and welcomes investigations, but adding that it “resists malicious shorting by any institution.”

Shen Lu

Shen Lu is a former Protocol reporter, covering China's tech industry.

he holdingsmuddy watersfraudchina
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