On February 25, 2021, pre-market, MOGU issued a press release announcing its unaudited financial results for the third quarter of fiscal year 2021. Among other results, MOGU reported that “[c]ommission revenues decreased by 29.8% to RMB99.2 million (US$15.2million) from RMB141.2million in the same period of fiscal year 2020, primarily due to the restructuring of the Company’s business towards a LVB-focused model”; that “[m]arketing services revenues decreased by 75.9% to RMB17.4 million (US$2.7million) from RMB72.5 million in the same period of fiscal year 2020 … primarily due to the restructuring of the Company’s business towards a LVB-focused model”; and that “[o]ther revenues decreased by 46.4% to RMB29.9 million (US$4.6million) from RMB55.9 million in the same period of fiscal year 2020, primarily due to a decrease in online direct sales.” MOGU also reported a loss from operations of RMB123.2 million, “primarily attributable to a goodwill impairment incurred in the third quarter of fiscal year 2020.”

On this news, MOGU’s American Depositary Receipt (“ADR”) price fell $0.43 per ADR, or 17%, over the next two days to close at $2.07 per ADR on February 26, 2021, damaging investors.

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