Grizzly bear, citron and muddy water have been short six times in a row

 Grizzly bear, citron and muddy water have been short six times in a row

On the evening of May 18, muddy water, a research company, released a short report on who to learn from online education companies, pointing out that at least 70% of users who learn from who cheat, and even up to 80% of users may be robots. In addition, at least 80% or even more than 90% of the income learned from others is fake, and there is a situation of false underreporting of expenditure. Before that, Chen Xiangdong, the founder, chairman and CEO of who to learn from, made it clear that there could be no fraud in learning from who.

After the muddy water report was issued, who should we learn from the decline of stock price on that day 7.3% , the latest market value is $7.8 billion. Compared with the highest market value of US $10.8 billion on February 24 this year, it has shrunk 27.7% u3002

In the past three months, the company has been shortlisted six times in a row, aiming at the authenticity of the companys revenue and number of users. Among the 261 Chinese companies, who can learn from? Currently, the market value ranks first. When they were short for the fifth time on May 9, the market value was $10 billion, ranking 24, higher than station B. On May 19, the market value ranking fell to 30, higher than that of 58 cities. Learn from whom the first quarter of 2020 financial report shows that the first quarter of this years revenue twelve point nine eight With 100 million yuan, it has become the second largest online education company in terms of income.

It has been noted that, although learning from others is comparable to XRS online school in terms of the revenue of public reports, there is not a small gap between XRS online school and XRS online school in terms of market popularity.

The reporter of Caijing randomly surveyed five parents of students, all of whom said they had limited knowledge of who to learn from the company and did not sign up for the courses of the organization for their children. The five parents were from Beijing, Shanghai, Hangzhou and Wuhan, and their children were all in the primary to junior high school stage.

Through Baidu Index and wechat index, Caijing reporter will make a horizontal comparison with who to learn, gaotu classroom, New Oriental, XRS and ape tutoring. In the past six months, the search index of who to learn and gaotu curriculum is lower than the three companies.

A 2C education company is not well-known. When most online education companies are still in the loss stage, they can keep the rapid growth of net profit for several consecutive quarters, which is considered to be the main reason for the attention of short sellers.

On May 7, Chen Xiangdong, the founder, chairman and CEO of the company, stressed in an interview with Caijing that its impossible to cheat with anyone. Once found, they will be dismissed immediately, and business line leaders will be jointly and severally liable. Those who cheat are not qualified for education. The next day, citron research, the research firm, issued a third short report on who to learn from, accusing it of transferring customer acquisition costs to other related companies.

In the past six months, China concept shares have encountered a crisis of trust, and many companies have been short or burst data problems. On April 23, Jay Clayton, chairman of the U.S. Securities and Exchange Commission, said publicly that he reminded investors not to invest in U.S. - listed Chinese companies stocks when adjusting their positions in the near future because of information disclosure problems.

So far, six short positions havent had a fatal impact on who to learn from. An online education industry person told Caijing that the evidence listed in the short position report is not fatal enough. Another investor who focuses on education thinks that it may be that the popularity of learning from others is not high, even if it is short many times, people do not pay attention to it.

According to the latest short selling report released by muddy water, based on the user and attendance data learned from whom, including more than 200 downloading data of paid K12 courses, covering 54965 independent users, as well as the confirmation of who the preschool manager is,

The conclusion is: with whom to learn to use the robot for user fraud.

Shen Nan, who learned from CFO, immediately replied that it was not related to robots, but caused by the shift switching between large and small classes in the live broadcast room. Therefore, the same user IP mentioned in the report would enter the classroom at the same time.

In addition, muddy water also pointed out that Chen Xiangdong at least mortgaged three point one eight With $100 million of shares and Credit Suisse as the lender, Zhejiang faces risks in its long-term investment in learning from others. Chen later replied that he only mortgaged 5.1 million ADRs, obtained a loan line of US $50 million, and attached the loan to bill.

Before this short, with whom to learn in the past three months has encountered five short.

On February 25, grizzlies released its first short selling report on who to learn from, saying that its net profit in 2018 was overstated by who to learn to transfer costs to controlled but not consolidated entities 74.6% u3002 For this report, Chen Xiangdong commented, its all nonsense. he called CFO Shen Nan and told her, dont worry, you can go back to sleep.

On April 14, citron released a short report that made it a little nervous to learn from others. After tracking more than 20% of available courses with whom, it is estimated that revenue in 2019 will be over estimated by 70%, and repeated calculation of revenue may be a way to inflate revenue, according to the report.

However, he still thinks the short report is meaningless because they didnt climb the data of gaotu class. If they add the data of gaotu, they can match our financial report data, which also proves that our data is true.

In addition to learning from whom, Jinyu school, Weishi and Chengqi business school, gaotu classroom has five products.

Although Mr Chen believes none of the shorting is credible, he has opted to shut down the internal systems mandate.

On May 1, citron issued its second short selling report, which mainly pointed out two problems: first, citing a dialogue recording document of employees of the company who used to swipe the bill, accusing them of learning to swipe wildly with whom, 40% of registered users in 2019 were fake; second, Chen Xiangdong controlled a number of undisclosed related parties, which were used to fabricate the financial situation with whom to learn, provide convenience for swiping the bill, and improperly deduct costs.

In this short report, citron attached the specific dialogue with the employees of the company. According to the employee, online education companies are the industrys practice, and their customers include who to learn from, tal and ape tutoring.

With whom to learn to brush the single platform is mainly with whom to learn and high way classroom, the proportion of virtual increase of students is 40%. Swipe companies register fake users on the platform, buy courses and write positive comments like real students.

The company said that it contacted the management directly and signed a contract with them. In 2019, the two sides have been cooperating. However, due to the epidemic, the company has stopped the business. However, tal and ape tutor have a small number of orders, and the employees of the two companies are in contact with them.

With whom to learn was founded in 2014 and listed in the US stock market in June 2019, the current number of employees is more than 10000. How to ensure that the more than 10000 employees do not cheat at all? Chen Xiangdong responded that there is no single brushing behavior with whom to learn, because employees have no motivation to brush, we only assess the renewal rate as an indicator, who will brush thousands of bills because of dozens of commissions?

Many insiders interviewed by Caijing said,

Its not surprising that the data of online education companies contain some water. Even if its not fake at the company level, its hard to avoid individual employees fake performance.

Chen Xiangdong mentioned that he did find some employees fraud. For employees with particularly good performance, they will conduct in-depth investigation. In addition, there is a problem feedback system within the company, which is directly fed back to him. In April this year, a team leader responded that the following salesman asked the parents of students to buy more classes at one time while taking advantage of the class reporting window, and then refunded them. Then the employee was dismissed.

Zhu Wenting, investment director of Qingtong capital, told Caijing that investors will focus on the authenticity of the data such as the actual value of users and the cost of acquiring customers of online education companies.

On May 6, Scorpio venture capital, the asset management organization, issued a short report, which raised questions about who to learn from in Zhengzhou to buy a house, free classes for employees, salary of famous teachers, false data, course quality, etc. According to the report, the actual stock value is estimated to be $4 - $6 in the future.

Scorpio pointed out that the real value of the land purchased in Zhengzhou is less than one seventh of the real value of residential and commercial land, and the transaction value is not equal. According to the report, it is against the relevant laws and regulations to learn to rent the site as an office building.

According to the report, in addition to the three undisclosed related parties mentioned in the second short selling report (Beijing Jiameng, baijiayuntu and jiajiacun), four undisclosed related parties were found, one is Beijing xiongdian technology partnership owned by Zhang huaiting, the former co-founder of who school, and Jia Yangyang, the former employee; the second is Wuhan Aobang Turing Technology Co., Ltd., which is called the parent company The third company is youshugongdu Education Technology (Yantai) Co., Ltd., also known as its parent company. The fourth company is Xiaoyi Jinxiu curtain City, the legal representative of which publishes the recruitment information of gaotu classroom, but the companys industrial and commercial registration is curtain sales business.

Xiang citron believes that by transferring the customer acquisition cost to these related parties, we can reduce the cost of learning from others, so as to realize the illusion of high profits.

Later, he replied that the companys financial statements had disclosed all the related companies, and the several companies mentioned by citron had no direct relationship with him. Beijing Union Global Education Technology Co., Ltd. is the only related party disclosed in the financial report.

Short six times in a row, focusing on questioning the profitability learned from whom - whether it is really profitable, or through the way of scribbling or transferring costs to make profits.

Although Chen Xiangdong said that these short reports are meaningless, they still cause trouble to the company. The most direct thing is that the auditors constantly ask for data and increase a lot of review work. Deloitte is the auditing company that I learned from. Such a big auditing organization pays great attention to reputation, especially at this time node. It is impossible to accompany the company to make fraud because of a little audit fee. Chen Xiangdong said.

During the continuous short selling, Chen Xiangdong made several rounds of internal speeches, focusing on corporate culture and how to respect employees. He said that he didnt care about the companys performance, income and profit, but more about corporate culture and values.

Who to learn from in the industry has been regarded as a company that attaches great importance to performance growth. Many insiders told Caijing,

With whom to learn the sales is very radical, in the middle of the night is also selling classes in wechat group, one with whom to learn employees also said that working overtime until midnight is the norm.

Two people who interviewed with whom to learn mentioned that the sales base salary with whom to learn is low, and the major income is mainly sales commission, so the sales pressure is great.

An industry person who has studied with whom commented to Caijing reporter that he knows user psychology very well, so he can get customers at a lower cost. Who to learn from? The first quarter financial report data shows that the cost of sales is seven point five seven two Billion yuan, corresponding to seventy-seven point four The average cost of acquiring customers is 978 yuan, which is lower than the average level of the industry. The cost of acquiring customers previously disclosed by XRS online school is 1300 yuan, and the cost of acquiring customers by Suntech institutions disclosed by the third-party data agency quest mobile is 4970 yuan.

Doubts about the renewal rate

On May 6, we released the financial report of the first quarter of 2020. The data is very bright. Q1 revenue twelve point nine eight Billion yuan, a year-on-year increase of 382%; net profit one point four eight Billion yuan, year-on-year growth 336.6% ; cash income thirteen point seven four Billion yuan, a year-on-year increase of 358%; the number of people paying for regular courses reached seventy-seven point four , a year-on-year increase of 307%.

This is also with whom to learn to keep profits for 8 consecutive quarters. Chen Xiangdong said that when he saw the latest financial data, he woke up at night with a smile.

However, a key data not disclosed in the financial statements is the renewal rate, which is one of the most core indicators to prove an education company.

Zhu Wenting said that the renewal rate is an important indicator of users recognition of educational products and services. It can not only drive the referral rate, improve the value of individual users, but also reduce the cost of customers.

Chen Xiangdong very much agrees with the importance of the data of the renewal rate. He said, the renewal rate with whom is the first in the same industry.

Many investors who pay attention to online education mentioned to Caijing that the renewal rate of offline education will be higher than that of online education, that of small class will be higher than that of large class, and that of online large class is usually lower.

An investor disclosed that he knew the data that the renewal rate of offline courses of New Oriental, park new and other large institutions could be 80%, and that of offline courses of Tal could be 90% at most. The renewal rate of XRS online school is about 60%, which is a very high level.

A person who has contact with whom to learn mentioned that who to learn has disclosed that their renewal rate is 75%, this number is amazing, I think its a bit incredible. She told Caijing.

Its impossible for large class online education to achieve such a high continuation rate, because teachers cant take every student into consideration. The current trend is that everyone is reducing the size of the course to maintain the continuation rate.

The industrys highest number of students who study large classes at the same time are online, with an average of 1700 students in a class online at the same time.

Zhu Wenting also agrees that the statistical caliber of each family is different, and it is really difficult to compare horizontally. But there are also many people in the industry who question the explanation, if your continuation rate is particularly high, why not say it?

Why has been questioned

With whom to learn was founded in 2014, the earliest business direction is Taobao in the education industry, which does not directly produce courses, but provides a trading platform for courses. However, this business direction was soon proved to be unsustainable, with serious losses. In 2016, learn from whom to start incubating the high-level classroom focusing on K12; in 2017, learn from whom to transform the business direction into K12 online large class curriculum, that is, from 2b to 2C.

With whom learning is a special company in the field of online education in China, it only completed two rounds of financing before listing, and obtained Angel round investment of Qibin capital in June 2014; in March 2015, it obtained a round of financing of Gaorong capital, Qibin capital, Jinpu investment and CITIC brocade, with an amount of $50 million, with a valuation Two point five Billion dollars.

In the four years after the transformation, no financing information has been released from who to learn. Chen Xiangdong has publicly stated for many times that this is because the company has self hematopoietic capacity and does not need to rely on financing.

In the past six years, who to learn from has been questioned by the outside world.

The first wave of wide-ranging queries came from who he learned to list in the US stock market in June 2019 before listing. Since March, Chen Xiangdong began to contact investors in a wide range. He recalled that investors questioned the financial data they learned from, believing that the data was too beautiful and untrustworthy.

Chen Xiangdong said that after the investors reviewed the financial data, they recognized the authenticity of the data, but began to question who they learned from the business model, believing that high performance growth was unsustainable.

In November 2019, who will learn to publish the financial report of the third quarter of 2019? According to the data, the top 10 lecturers contributed 40.5% The proportion of income has declined, but it still relies heavily on head lecturers.

Later, the query focused on the growth of learning from others, mainly relying on wechat dividend. After the dividend disappeared, the high growth is still unsustainable. In response, Chen Xiangdong said that there was indeed a wechat dividend from 2017 to 2018, but it was gone by 2019, we have maintained a high growth after 2019.

Ive kicked Southeast RONGTONG and China high speed channel, and many questions raised this time are also very reasonable. K12 large class teaching is currently in the stage of horse racing and enclosure, and other companies cant make profits. Who can I learn how to achieve high growth while maintaining profits?

There are different opinions about whether K12 mode can be profitable. One founder of the head online education company replied to Caijing that whether the company can be profitable is actually an accounting problem, because the acquisition cost of education products is reflected in the current period. If the income and profit are reflected in the long term, it will naturally be profitable, it depends on which accounting cycle you use to calculate the account.

In online education, high growth and profitability are often difficult to achieve at the same time. The problem is the high customer acquisition cost. With the help of capital, some online education companies use the Internet to burn money for traffic, which leads to high customer acquisition cost in the whole industry. To solve this problem, it is necessary to refine the operation, but this requires the company to slow down.

Learn from others who can keep profits while achieving high growth. Many insiders believe that this is because the starting point is low, so it seems that the growth rate is very fast. Chen Xiangdong also agreed with the statement, people who have been looking at our growth have not seen how difficult we have been before 2017, and the company has been in a loss state for the first three years of its establishment.

The credit crisis of Chinas stock market has emerged. Over the past few years, there has been a certain degree of bubble in some fast developing industries. Online education is one of them. Once financial fraud is realized, it will be a devastating blow for the company.

With whom to learn the short has not stopped, citron said it will continue to investigate and disclose more information about who to learn. Five rounds of short selling let more people know who to learn from, at the same time, more and more people will use the magnifying glass to closely follow who to learn business.