To The Moon

Grizzly is shorting $Pinduoduo Inc.(PDD)$.

It's important to consider why foreign investors think this way when they may not fully understand China.

Conclusion: It is highly unlikely to impact Pinduoduo's business significantly, but from an investor's perspective, speculating on geopolitics can only worsen global markets.

Discussion 1: Lack of understanding of China's operations and the core of Pinduoduo being direct sourcing. From an American perspective, the concept of $9.9 free shipping might not exist, and profitability under such conditions may seem improbable due to the need for abundant labor, low-cost manufacturing, and a developed logistics system. The United States is developed but may not meet all these conditions.

Discussion 2: Temu is not tailored for Americans; it might be more relevant to third-world countries. It's possible that Temu will eventually exit the U.S. market, but it could survive in Southeast Asia(just entered) and South America, similar to Tencent's international expansion.

I’m not sure if it will be the same success in Southeast Asia, but at least without Temu's drag on the U.S. market, Pinduoduo's profits might be higher.

Discussion 3: Temu's rapid growth in the U.S. is due to the high inflation and interest rates there. Increased income inequality leads to a significant demand for affordable goods among low-income populations. The Chicago Fed's research has shown that excess savings accumulated during the pandemic are running out, especially for low-income households. In this situation, what choice do they have but to buy inexpensive goods?

Discussion 4: Pinduoduo has a rough reputation, that's part of its DNA. Americans underestimate the resilience of a rogue company. Rogue companies may pay some price for their ruthlessness, but they are the least likely to be spies. If rogue companies had the capability to be spies, they wouldn't need to earn hard-earned money. If Pinduoduo had been more cautious, it wouldn't have been delisted by $Alphabet(GOOG)$ .

Discussion 5: The stock price of $NASDAQ 100(NDX)$ index components isn't subject to speculative manipulation like meme stocks; it requires a valuation basis. Many people find Pinduoduo's $120 billion market cap exceeding JD.com unreasonable, but both the P/E ratio and PEG suggest that Pinduoduo is superior. Why shouldn't it enjoy a higher valuation?

In recent years, the best example of shorting Chinese companies is Muddy Waters' short on $Luckin Coffee Inc.(LKNCY)$, as they collected data at the actual stores. Grizzly has a high failure rate, primarily because they only accept internet information and engage in propagandas, which may be a common problem among most Americans.

Perhaps one day, Grizzly's researchers can put down their Starbucks cups, step out into the world, interact with people from different regions, even visit American impoverished areas, and gain inspiration for different lifestyles. Perhaps they can be inspired by different ways of life, rather than just using "national security" as bargains.

If its business, let just talk business.