WhatsApp Message Zaps Indian eCommerce Firm’s Stock

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Want a nod to the power of a message – to the power of social media?

Look no further than the weight of a single WhatsApp message, which sank a stock in India, erasing almost three quarters of its value.

Bloomberg reported Friday that eCommerce firm Infibeam Avenues Ltd shares plunged 71 percent after a WhatsApp message that had “circulated among traders” centered on the company’s accounting methods caused holders to flee the stock of the company, which sells iPhone and iPads.  The eCommerce company sells into both the B2B and B2C arenas and is one of the only authorized retailers for the aforementioned Apple products, said Bloomberg.  Separate notes from over the summer, issued via Equirus, had stated that the company had been adding about 1,500 merchants each month.

The WhatsApp message, said the newswire, had been attributed to Equirus Securities, had been sent months ago and then surfaced again on the messaging platform on Thursday.  That’s according to unnamed sources per Bloomberg.

That message had said, per Bloomberg, that the company had given interest free loans to its own units.  Bloomberg did note that as filings earlier in the year had stated, there had been loans extended to related companies worth as much as $18.6 million.

That downturn in the stock had been enough to bring management of the firm to state that, per an announcement given to the exchanges, nothing was forthcoming (as the company was scheduled for a shareholder meeting Saturday) to warrant any changes to the share price.

The WhatsApp message and share price dive seemed to spur the company to issue a clarification, as site Moneycontrol News stated.  The company said that the loan had been given to subsidiary NSI Infinium Global, “solely for its business and operations,” according to the statement.  NSI operates the “flagship portal” of Infibeam, said the company, and owns Buildabazaar for merchants, and which comes integrated with payment gateways.

“Given the nature of business of NSI, the net worth of NSI has been negative. However, please note that the net worth of NSI has improved in the last two fiscals and the company expects net worth of NSI to improve in coming years,” said the statement.

 

Source: PYMNTS

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