(Yicai Global) July 29 -- Missfresh has not gone out of business, according to a source at the cash-strapped Chinese fresh produce e-retailer backed by Tiger Global and others, after a bankruptcy rumor sank its Nasdaq-listed stock by nearly 43 percent.

Rumors about the startup going bust are false, the person told Yicai Global yesterday. The reported job losses at Missfresh are part of business and organizational changes, the source said, adding that it is exploring all possible solutions to protect the rights and interests of employees.

According to posts doing the rounds on social media yesterday, Beijing-based Missfresh announced its dissolution following a meeting yesterday afternoon. Staff did not get severance packages nor salaries, the posts claimed.

That sent its shares [NASDAQ: MF] crashing 42.6 percent to close at 14 US cents apiece. Missfresh has lost 98 percent of its value in the past 12 months. In pre-market trading today, the shares were down a further 7.6 percent as of 5.45 a.m. local time.

Missfresh did announce the end of its fast delivery service yesterday, which had allowed customers living within three kilometers of a front-load warehouse to receive orders within 30 minutes. Users can still place next-day orders via its app, and JD.Com's logistics arm will make deliveries, Yicai Global learned.

Unlike conventional warehouses, which are usually located in city suburbs, Missfresh’s units in Beijing, Tianjin, and Shanghai are close to residential communities, speeding delivery times and ensuring the freshness of produce.

The startup said on July 14 that it had secured a CNY200 million (USD29.7 million) investment from Donghui Group and reached a strategic cooperation deal with the tourism group. But a staffer told Yicai Global that at yesterday’s meeting Missfresh said the CNY200 million was not forthcoming and the firm was out of cash now.

Missfresh logged a net loss of CNY973.7 million (USD144.4 million) in the third quarter of last year, widening 58 percent from a year earlier. Net income soared 47 percent to CNY2.1 billion (USD311.3 million). Since then, it has not released any quarterly earnings reports.

Issues affecting fresh food e-retailers are common to other internet startups as well, according to Pan Helin, a digital economy expert at a research center under Zhejiang University. These startups face the risk of ruptured cash flow, if they do not have a certain ability to make profit and monetize services and products, he said.

Editors: Xu Wei, Futura Costaglione