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  • GSX Accounting Practices

     Jesse updated 7 months, 3 weeks ago 3Members · 3 Posts
  • Jack

    Member
    May 19, 2020 at 2:21 pm

    I am not sure if any of y’all have done any research on this or heard about this. I was watching CNBC Fast Money yesterday and the CIO of an investment firm called Muddywaters was on and he was talking about the stock GSX which is an online education based company out of China. Basically he said that they had used a former GSX manager and downloaded there account users and found that around 70-80 percent are bot accounts. Im going to attach the youtube video here he explains it better then I do https://www.youtube.com/watch?v=EMNME1EsH50. They have a whole write up on how they shorted the stock. I work in public accounting although I am on the transaction side this is such a big issue that Chinese regulators do not allow PCAOB inspections. Basically speaking Chinese listed companies are not held to the same standards as US based companies. I dont know whether this guy is correct or not but I do know this continues to be a big issue.

  • Gabby

    Member
    May 26, 2020 at 6:59 am

    Thank you for sharing. I have read or listened to similar articles. I wonder if other countries do this similar thing, and we have not paid attention.

  • Jesse

    Member
    May 26, 2020 at 10:18 am

    I saw this too and I also saw the Carson Block saying that there are a significant number of similar companies. I personally don’t short stocks, I’ve never had much luck with it so I don’t seek out these types of companies. The new bill that was passed would delist existing and bar new Chinese companies unable to show 3 consecutive years without foreign government involvement. I think this is very fair. I found this very interesting, it’s not something I thought the U.S had as leverage during the current trade war.

    If they’re going to be targeting/removing Chinese companies I personally would stay away from them. But that’s just me.

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