Alibaba may be feeling a little distressed at the moment with the SEC probing the company’s operating data from Singles Day.
Singles Day was the Chinese e-commerce giant’s annual blockbuster sales day that generated more than $14 billion in revenue on November 11th.
In a public filing released late Tuesday, Alibaba acknowledged the investigation which subsequently sent shares tumbling in pre-market trading on Wednesday. Alibaba shares (BABA) fell 2.7% to $78.85 before the open.
Many investors may have flocked into panic mode as earlier this year, Jim Chanos, the hedge fund manager who was one of the first to detect problems at Enron, says the accounting at Alibaba Group is as problematic as Enron.
Whether the fact that Chanos specializes in short selling or betting on certain stocks dropping has anything to do with this belief, the SEC is sure to find out soon enough.
The company said it is cooperating with the investigation, which is also probing accounting related to the company’s investment in logistics firm Cainiao Network as well as “our policies and practices applicable to related party transactions in general.”
“Earlier this year, the SEC informed us that it was initiating an investigation into whether there have been any violations of the federal securities laws,” Alibaba said.