Investors betting against JD.com made $153 million after the company's CEO was accused of sexual misconduct

JD.com founder and CEO Liu Qiangdong in 2014.
  • JD.com plunged after its CEO was detained in the US over a sexual-misconduct allegation.
  • Short sellers made $US153 million in profits from the stock decline, which saw shares fall 14% last week.
  • Watch JD.com trade in real-time here.

JD.com short sellers – or investors betting on the company’s stock to fall – made millions last week after CEO Liu Qiangdong was detained in the US over a sexual-misconduct allegation.

Following the news that Liu was arrested over a rape allegation in Minneapolis over Labour Day weekend, JD.com’s stock dropped 14% last week. That generated mark-to-market profits of $US153 million for short sellers, according to data from financial analytics firm S3 Partners.

“Short sellers have been selling into JD.com’s price weakness since mid-July with 7 million new shares shorted since July 15, up 23%,” Ihor Dusaniwsky, managing director of predictive analytics at S3, said in an email.

Overall, short sellers have made $US392 million in mark-to-market profits since January, most of which occurred during the second half of the year, Dusaniwsky added. S3 data shows JD.com is now the seventh-largest short in the Hong Kong/China region, with $US1.03 billion of short interest.

Last month, JD.com, the second-largest Chinese e-commerce company after Alibaba, posted a loss of $US0.23 per share on revenue of $US18.5 billion. Analysts surveyed by Bloomberg were expecting a $US0.12 per share gain on revenue of $US19.31 billion.

Shares of JD.com are down 38% this year.

Now read:

JD.comBusiness Insider

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.