Shares of 9F (NASDAQ:JFU) plunged today, down by 18% as of 2:53 p.m. EDT, after the company reported earnings results for the first half of 2020. The stock is now trading below $1, an important threshold that is required to remain listed on the Nasdaq.
Revenue in the first half of 2020 fell by 61% to 848.4 million yuan ($120.1 million), which resulted in a net loss of 744.6 million yuan ($105.4 million). On an adjusted basis, the Chinese fintech company lost 454.3 million yuan ($64.3 million). Loan origination volume in the first half declined by 90%, while the number of active borrowers decreased by 84%.
9F said its business continues to be significantly impacted by the COVID-19 pandemic as well as tightening regulatory standards in China. In June, the company disclosed that it was engaged in a legal dispute with PICC Property and Casualty Company, alleging that PICC breached a contractual obligation to pay services fees related to 9F's direct lending program. Shareholders have filed various class action lawsuits accusing the company of misleading investors by not disclosing that dispute.
As a result of the ongoing challenges, 9F says it is considering "certain adjustments" to its business, which may include divesting certain businesses that are not being funded by licensed institutional funding partners, focusing more heavily on its technology platform, or developing new product offerings for e-commerce or multi-layered wealth management.
9F warns that the dispute with PICC is still in the preliminary stage and that it cannot predict the outcome at this time.