China's plunges for a second day after CEO arrest on rape accusation

Key Points
  • shares have dropped for two straight days on concern about the fate of the company's CEO Richard Liu.
  • Liu's lawyer has reportedly said that his client denies any wrongdoing.
Richard Liu, founder and chief executive officer of
Billy H.C. Kwok | Bloomberg | Getty Images

Shares of Chinese e-retailer plunged 11 percent on Wednesday, dropping for a second straight day, after CEO Richard Liu was arrested last week in Minneapolis after rape allegations.

The Minneapolis police department said on Tuesday that Liu was taken into custody on Friday night. He was released without bail the following day and then returned to China, according to news reports. He has not been charged with any crimes. shares have dropped 16 percent in the past two days, with its U.S. shares closing at $26.30 on Wednesday. The stock has plummeted 37 percent this year.

Liu, who founded in 2004 and has parlayed his ownership into a stake worth billions of dollars, controls about 80 percent of the company's voting rights. Stifel analysts lowered their rating on the stock to $39 from $48 on Wednesday, citing increased uncertainty.

"We expect investors will view the recent events as an additional risk to a stock that has already struggled YTC," the analysts wrote. "The additional negativity could continue to be an overhang on shares for some time." didn't immediately respond to a request for comment. According to a Reuters report, Liu's attorney said that his client denied any wrongdoing.

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