Short sellers bet the stocks will fall. Web"Camber Energy, Inc. (NYSE:CEI) shares are trading lower following a short report on the company from Kerrisdale Capital. As alleged, GPB Capital actually used investor money to pay portions of the annualized 8% distribution payments. Shares ended the day down 26% to close at $24.95. (Bloomberg) -- C3.ai Inc. fell the most ever in a single day after short-seller Kerrisdale Capital alleged serious accounting and disclosure issues at the enterprise software developer. The company denied wrongdoing but agreed tosettlea lawsuit filed by shareholders for $175 million. Kerrisdale also flagged concerns around a jump in unbilled receivables from one customer, Baker Hughes Co. Copyright 2023 InvestorPlace Media, LLC. The Securities and Exchange Commission today charged three individuals and their affiliated entities with running a Ponzi-like scheme that raised over $1.7 billion from securities issued by a New York-based asset management firm and registered investment adviser, GPB Capital. In the report, Kerrisdale characterizes DWAC stock as the poster child for some of the worst abuses the investment vehicle has spawned. The investment vehicle here refers to SPACs. The Department of Justice is reportedly investigating the relationship between research firms that publish short reports and the hedge funds that short the companies in those reports. 5 Hypergrowth Stocks With 10X Potential in 2023. Local authorities are . Phone: +1 800 585 0871 Fax: +1 908 362 5860 The short seller believes that the company has inflated its gross profit margins and 5 Hypergrowth Stocks With 10X Potential in 2023.

As alleged, the fraudulent scheme continued for more than four years in part because GPB Capital kept investors in the dark about the limited partnership funds true financial condition, failing to deliver audited financial statements and register two of its funds with the SEC. Copyright WebU.S. "While we're presently optimistic on uranium prices and believe that they need to rise to meet continued demand growth, we don't expect UEC - or its shareholders - to be any more successful this time around," Kerrisdale said. Realtime quote and/or trade prices are not sourced from all markets. Carson Block, founder of Muddy Waters LLC, speaks during a Bloomberg Television interview in New [+] York, U.S., on Wednesday, July 17, 2013. All quotes delayed a minimum of 15 minutes.

The firm believes HubSpot is a COVID beneficiary whose growth will ultimately disappoint. Our Standards: The Thomson Reuters Trust Principles. Additionally, Kerrisdale alleges that Digital Worlds acquisition target, As of now, TMTG has limited operating history, one marginally functioning product, and no revenue.. C3.ai Inc. fell the most ever in a single day after short-seller Kerrisdale Capital alleged serious accounting and disclosure issues at the enterprise software developer. Photographer: Peter Foley/Bloomberg. Activist short seller Kerrisdale Capital just doubled down on its C3.ai (NYSE: AI) short thesis, driving the stock down as much as 24% intraday. The Rosen Law Firm, P.A. ", This is a BETA experience. Warner Bros. Nears Deal for Harry Potter Online TV Series, UBS Chairmans Top-Secret Prep Paid Off in Credit Suisse Moment, Chinas Yuan Replaces Dollar as Most Traded Currency in Russia, Bernard Arnaults Fortune Soars Past $200 Billion for First Time, Read the New York Felony Indictment Against Trump. 2023 InvestorPlace Media, LLC. In addition, C3.ai holds a Relative Strength Rating of 99 out of a best-possible 99, according to IBD Stock Check-up. The other two shorts are HubSpot Contacts Laurence Rosen, Esq. All rights reserved. WebC3.ai AI 26.34% shares were falling sharply for a second day after the short-selling firm Kerrisdale Capital published a letter to the artificial intelligence software companys In our opinion, C3.ai has utilized highly aggressive accounting to inflate its income statement metrics in order to meet sell-side analyst estimates for revenue and certain profit metrics, and to conceal significant deterioration in its underlying operations, explained Adrangi. 1125 N. Charles St, Baltimore, MD 21201. Will Protests In Paris Change Macrons Mind? The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines. Ivan Cosovic of Breakout Point offers some highlights of December's haul for short-sellers in an email. According to Breakout Point, Night Market Research also had two of the top 10 best short calls with Mountain Valley MD and BeyondSpring. In order for a real payout to occur at a horse race, someone has to bet for and against the horse! The SEC also charged GPB Capital with violating the whistleblower protection laws. Sign In. Nasdaq This will increase competition within this market and Astra may not be in a position to compete. The company has made orbit once, but can lightning strike twice for the smallsat launcher? "They also provide a valuable service by taking the opposite side of (long) trades, providing needed liquidity to the markets. The hedge fund, who back in March published a bearish "short report" on the enterprise AI firm, said that it sent a letter to C3.ai's auditor Deloitte and the SEC documenting accounting issues. (888) 508-6832 (toll-free)cholzer@holzerlaw.com, To view the source version of this press release, please visit https://www.newsfilecorp.com/release/98655, https://www.newsfilecorp.com/release/98655, Pension protests to bring 'maximum' workers in France after government, union talks fail, INDIA STOCKS-Indian shares open lower ahead of RBI policy decision, UPDATE 1-A wary US watches Trump in criminal court, hoping for justice, Allianz Taiwan Fund Ramps Up Bets on 2023 Chip-Sector Revival, Stocks Slide as Recession Fears Buoy Haven Assets: Markets Wrap. The other According to a well-informed source, however, at its current stage of development, the rate of Astras rockets failing may be as high as 1 in 2.

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And soon, the company will have just been a dream too. The Securities and Exchange Commission today charged three individuals and their affiliated entities with running a Ponzi-like scheme that raised over $1.7 billion Furthermore, the hedge fund disclosed that it is short shares of DWAC stock. "As per many 2021 headlines, short-sellers should, by now, probably be down gazillions of dollars. U.S. Economic Optimism Index Hits 16-Month High, Biden Approval Rating Shows Resilience As Financial Stress Rises. Astra Space went public on the NASDAQ on June 30, 2021, and finished its day at $12.90 a share. Kerrisdale highlights that TMTGs forecast states that it will generate $1.8 billion of revenue in the next four years. The letter alleges "serious accounting and disclosure issues." WebKerrisdale Capital Management Company Name Kerrisdale Capital Management Main Industry Finance Website www.kerrisdalecap.com Contact Information Headquarters 1212 Avenue of the Americas Fl 3, New York, New York, 10036, United States (212) 792-7999 Kerrisdale Capital Management Profile and History - the capital markets are littered with liars, scum, thieves! ", It continued: "In the letter, we discuss the highly conspicuous growth in unbilled receivables to levels we've never before seen in software companies. AI stock C3.ai plunged another 12% after Tuesday's short-seller 3:14 AM ET It is no surprise that Astra is aiming for low-cost vehicles to be competitive. For short-squeeze traders, these waves are not fun ones. According to Spruce Point, the company is "reporting remarkable financial success, wildly expanded margins at its European targets, and cash flow after years of operating in the red." Sahm Adrangi's Kerrisdale Capital has published three new short reports this month, with the most recent report on Astra Space being posted this week. Muddy Waters accused the company of inflating its revenue. Eddie Pan specializes in institutional investments and insider activity. The investigation is related to statements made in its S-1 filing. C3.ai has not responded. This is based on its cash balance. This has resulted in a cumulative cash flow entry of negative $76 million due to changes in accounts receivable. The short seller believes that the company has inflated its gross profit margins and misclassified certain items. The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs. This copy is for your personal, non-commercial use only. Therefore, with that in mind, lets jump into the details of the short report. According to the complaint, these defendants along with Ascendant Alternative Strategies, which marketed GPB Capitals investments, told investors that the distribution payments were paid exclusively with monies generated by GPB Capitals portfolio companies. Already a subscriber? Before the plunge, the company had benefited from a recent spike in investor interest in artificial intelligence, and its stock has more than doubled this year. This action shows our continued pursuit of those who deceive investors and conceal their misconduct to reap profits for themselves., Jane Norberg, Chief of the SEC's Office of the Whistleblower, added, Whistleblower protections are a cornerstone of the SECs whistleblower program. Either require the company to come clean in its upcoming audit or resign and let C3.ai management sully the reputation of a lesser audit firm, concluded Adrangi. In the quarters prior to April 2022, unbilled receivables were always less than $10 million. SOPA Images / Getty Images. Expect many more failures as Astra ramps up its launch efforts. 1 Twitter 2 Facebook 3RSS 4YouTube The companies Kerrisdale has shorted in the past include Digital World Acquisition Corp (DWAC.O), a blank-check firm that is set to merge with former U.S. President Donald Trump's media and technology firm, Plug Power Inc (PLUG.O); Virgin Galactic Holdings Inc (SPCE.N) and Camber Energy Inc (CEI.A). Kerrisdale said it is short shares of C3.ai. Baker Hughes and Deloitte didnt respond to a request for comment. Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. So how does one weigh the benefit for the market versus the benefit received by the hedge funds when they publicly report one of their shorts? *Real-time prices by Nasdaq Last Sale. All rights reserved. Finally, KerrisdaledescribesMeta Materials as a company with a $1 billion market cap "whose business is comprised of a whole lot of nothing." Finally, Adrangi states that C3.ai has cycled through four chief financial officers (CFOs) in the past four years, which should be a clear red flag for Deloitte. Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology. "The American public markets have no place for deceitful accounting," Kerrisdale wrote. The FBI took computers from the home of Andrew Left, the founder of Citron Research, which is known for its The stock remains 95% higher so far this year. Shortly after its SPAC announcement, Astra publicly disclosed (without any credible technological explanation) an increase in the targeted capacity of its rockets; shortly thereafter, and surely to Astras embarrassment, the public learned that Astra had entered into an agreement allowing it limited access to study one of its competitors rocket engine IP in exchange for $30m. In a statement, C3.ai called the letter a highly creative and transparent attempt to diminish the stock price. It has been six months since the merger announcement, and there is still no S-4 form to be found. Kerrisdale values DWAC stock at $10 per share. Access your favorite topics in a personalized feed while you're on the go. On October 5, 2021, Kerrisdale Capital issued a report which stated that, Camber is a defunct oil producer that has failed to file financial statements with the SEC On this report, the price of the Company's stock plummeted. Article printed from InvestorPlace Media, https://investorplace.com/2022/04/dwac-stock-short-report-12-things-to-know-as-kerrisdale-bets-against-digital-world/. I write about hedge funds with a focus on emerging managers, York, U.S., on Wednesday, July 17, 2013. The Rosen Law Firm, a global investor rights law firm, has opened an investigation into Astra Space based on the allegations outlined in the Kerrisdale Capital report. Deloitte doesnt need to rubber stamp fraudulent accounting. Astra is falling behind its competitors. Jennifer Sor. It Depends On Whom You Ask, Why Every Good Stock Market Investor Needs A Breakup. The report further alleged that Camber only has one real asset, a 73% stake in an OTC-traded company with negative book value. Add Space Explored to your Google News feed. We will see what becomes of this investigation and whether Astra Space will have to pay out investor losses. However, many hedge funds are holding their ground as the investigation proceeds, and they continue to issue short reports and act upon them. Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. First reported by The Verge, this deal involves Firefly Aerospace giving Astra access to its IP for the Reaver rocket engine. C3.ai shares have more than doubled in 2023 as investors flocked to artificial intelligence stocks following the viral success of OpenAI's ChatGPT. Kerrisdale values Digital World at $10.

C3.ai (AI) stock tumbled on Tuesday after Kerrisdale Capital said it has sent a letter to the software maker's auditor, Deloitte & Touche, regarding "serious accounting and disclosure issues." The firm believes Astra is a "story stock that's yet another example of the questionable businesses going public via SPACs." The China Trade: Demand Boom or Inflationary Bust? Kerrisdale highlights that TMTGs forecast states that it will generate $1.8 billion of revenue in the C3.ai 's initial public offering in early December 2020 raised $651 million. C3.ai Inc. fell the most ever in a single day after short-seller Kerrisdale Capital alleged serious accounting and disclosure issues at the enterprise software developer. We recommend reading this report should you be interested in the full context. Try SwingTrader. If you purchased Camber stock and suffered a loss on that investment, you are encouraged to contact Corey D. Holzer, Esq. This year's other top calls include Bonitas' call on Ageagle Aerial Systems, Wolfpack's call on Chinese firm EHang Holdings, and Hindenburg's and Culpers' calls on the Chinese firm Sos Ltd. Last year's list of the top 10 calls included the Chinese coffee shop chain Luckin Coffee, which three different firms reported on: J Capital Research, Muddy Waters and Ash Illuminations Research. Bloomberg reported that Luckin Coffee is one of the targets being reviewed by federal prosecutors investigating the relationship between research firms that publish short reports and hedge funds. In the meantime, Kerrisdale Capital has published a report entitled Astra Space Inc (ASTR): Headed For Dis-Astra, which looks into Astras claims and market predictions. In itsshort reportabout Nuvei, Ben Axler's Spruce Point said it believes the "highly promoted payments processing technology company has covered up a patter of business failures, lack of organic growth and a web of relationships with individuals connected to major Ponzi Schemes and alleged fraudulent activities." Meanwhile, days sales outstanding (DSO) has risen to 197 days, a level unheard of among software companies.. Shares of Redwood City, California-based C3.AI fell as much as 23% to $26 on Tuesday in New York. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com. Copyright Kerrisdale Capital noted in the report 'We are short shares of Camber Energy, Inc. Camber is a defunct oil producer that has failed to file financial statements with the SEC since September 2020, is in danger of having its stock Shares of C3.ai (US:AI), the enterprise software company that had a hot IPO in 2020, dropped sharply in trading Tuesday, after short seller Kerrisdale Capital Help others find us by following on Apple News and Google News. Eddie Pan specializes in institutional investments and insider activity. In short, the SEC killed the three companies.. Nasdaq C3 is the subject sent by Kerrisdale Capital ("Kerrisdale") to the Company's auditor, Deloitte & Touche on April 4, 2023. Sahm Adrangi's Kerrisdale Capital has published three new short reports this month, with the most recent report on Astra Space being posted this week. The complaint also charges GPB Capital and Gentile with violating the antifraud provisions of the Investment Advisers Act of 1940 and charges GPB Capital with violating the registration and whistleblower provisions of the Exchange Act and the Advisers Acts custody and compliance rules. Let's take a look at how research firms serving hedge funds have done with their short calls this year and at whether the market benefits from these reports at all. Washington D.C., Nov. 5, 2021 . Attorneys Office February 05, 2013. Article printed from InvestorPlace Media, https://investorplace.com/2023/04/c3-ai-ai-stock-sinks-as-kerrisdale-capital-highlights-accounting-concerns/. For short-squeeze traders, these waves are not fun ones. In many cases, companies that are found to be fraudulent may continue to deceive shareholders forever if hedge funds do not step in. The agreement referred in the report is a deal Astra made with Firefly Aerospace. SOPA Images / Getty Images. "Eleven stocks were added to short sellers' naughty list in December," he said in an email. Short sellers typically sell borrowed securities and aim to buy these back at a lower price. AI News: Artificial Intelligence Trends And Leading Stocks, Dow Jones Futures: AI Stock Keeps Sliding; Johnson & Johnson Rises, Indexes Fall On Recession Fears; C3.ai, Atkore, ServiceNow In Focus, Dow Jones Falls, Meme Stocks Dive As Amazon Rises On $130 Billion Opportunity, Dow Jones Rallies 300 Points Amid Key Economic Data; Tesla Slides On Deliveries Miss. "Only about a quarter of the resources will be economically viable even at the much higher uranium prices.".

(Updates with closing shares in the third paragraph. Sahm Adrangi founded Kerrisdale Capital in 2009. The Rosen Law Firm has opened an investigation into Astra Space, Inc. [NASDAQ: ASTR] due to allegations that Astra presented misleading material to the public. C3.ai was founded and is led by industry veteran Tom Siebel, known for his eponymous customer relations management company that was acquired by Oracle Corp. in 2006. ARC Group-related entities sponsor DWAC. Specifically, the hedge fund accuses Digital World of misleading statements, disregarding U.S. Securities and Exchange Commission (SEC) rules, and having a discombobulated management team. at cholzer@holzerlaw.com or Joshua Karr, Esq. All rights reserved. As alleged in our complaint, the defendants told investors that they would be paid distributions from profits of the portfolio companies when, in reality, many of the payments were being made from the investors own funds, said Richard Best, Director of the SECs New York Regional Office. Washington D.C., Feb. 4, 2021 . The accounting concerns noted by Adrangi include misclassifying subscription revenue, costs of revenue and highly conspicuous growth in unbilled receivables. Lets get into the details.

Adrangi believes that rising receivables is attributed to rising unbilled receivables. Multiple industry executives we interviewed, who routinely secure launch services for small satellite manufacturers on a global basis, agree that Astras rocket dimensions and payload capacity are well below the sweet spot of customer needs. Shares of C3.ai (NYSE:AI) stock are plunging lower by more than 20% after short seller Kerrisdale Capitalpenned a letter to C3.ais audit committee; Deloitte, the companys auditor; and the Securities and Exchange Commission (SEC). This year's most successful short-sellers. Astras attempt to catch up is self-evident. The report essentially boils down to this: Astra has big dreams, but they are likely to remain dreams. Kerrisdale also recently took a short position in Uranium Energy (UEC).

Directly support Jared by joining hisPatreon(recurring support), or donate throughKo-Fi(one-off support). Valued at $2 billion, Astra Space is working on its launch vehicle to carry payloads up to 500kg to orbit. shares were falling sharply for a second day after the short-selling firm Kerrisdale Capital published a letter to the artificial intelligence software companys auditors alleging a series of accounting irregularities, including that it was overstating revenue and margins. Jurors in Boston federal court today returned a verdict in the Securities Exchange Commissions favor against a hedge fund adviser and his investment advisory firm. Astra also has plans to build its own satellite constellation in the future. We believe Astras reliability goal for its rockets is 80% (which itself is not exactly confidence inspiring). Spruce Point also believes the company's financial disclosures are weak and that its results "are being temporarily enhanced from concentrated exposure to high-risk gaming and eCommerce.". "Hedge funds that uncover shortcomings in companies and short stocks provide a valuable service to the markets by 'outing' companies who are not running sound businesses," she said in an email. The Dow Jones reversed higher Wednesday morning after ADP's jobs data. 3:14 AM ET 1. ), Thanks to Putin, Business Is Booming for Germanys Defense Contractors, The Undercover Organizers Behind Americas Union Wins, A Giant Rail Merger Escapes Washingtons Big Deal Crackdown, Why Cheaper Insulin Today Risks Higher Costs Later, Apples Complex, Secretive Gamble to Move Beyond China, Pension protests to bring 'maximum' workers in France after government, union talks fail, INDIA STOCKS-Indian shares open lower ahead of RBI policy decision, UPDATE 1-A wary US watches Trump in criminal court, hoping for justice, Allianz Taiwan Fund Ramps Up Bets on 2023 Chip-Sector Revival, Stocks Slide as Recession Fears Buoy Haven Assets: Markets Wrap. Shares in C3.ai had surged more than 200% in 2023 amid buzz over OpenAI, ChatGPT and generative AI technology. Attorney Advertising. Learn how you can make more money with IBD's investing tools, top-performing stock lists, and educational content. Shares of Digital World Acquisition (NASDAQ:DWAC) are down more than 5% after Kerrisdale Capital released a 27-page short report on the special purpose acquisition company (SPAC). GPB Capital allegedly violated the whistleblower provisions of the securities laws by including language in termination and separation agreements that impeded individuals from coming forward to the SEC, and by retaliating against a known whistleblower. This launch was aborted early into flight. It holds an entry point of 31.02. C3.ai Holzer & Holzer, LLC is an Atlanta, Georgia law firm that dedicates its practice to vigorous representation of shareholders and investors in litigation nationwide, including shareholder class action and derivative litigation. Astras stock price plummeted following the report by market analyst Kerrisdale Capital, a short seller of Astra Space. Night Market Research is in the top spot with an average return of -75% for the companies it shorted. However, short-sellers saw stocks they publicly talked about decline [an] amazing 42% on average (if all major short calls from period Jan-Nov are observed).".

quotes delayed at least 15 minutes, all others at least 20 minutes. February Brought A Reversal Of Fortunes For Hedge Funds, According To Multiple Data Sources. Webthis investigation, Straight Path agreed to pay up to $100 million over time, surrender many of its licenses, and sell its entire remaining spectrum portfolio, with 20% of the sale proceeds going Kerrisdale Capital Management, LLC | 1212 Avenue of the Americas, 3rd Floor | New York, NY 10036 | Tel: 212.792.7999 | Fax: 212.531.6153 5 Kerrisdale Capital is one of nearly 30 short-selling firms being probed by the US Justice Department over potential trading abuses. The letter calls out significant turnover among chief financial officers, as four people have held the role since 2019. The subscription revenue that Baker pays C3.ai is being recognized at an over 99% gross margin, which the short seller alleges is inflated. HUBS C3.ai plummeted 26% on Tuesday after a short seller alleged serious accounting issues. as well as other partner offers and accept our, C3.ai shares have more than doubled in 2023, Registration on or use of this site constitutes acceptance of our.

Sign up for our newsletter to get the inside scoop on what traders are talking about delivered daily to your inbox. The SECs complaint alleges that David Gentile, the owner and CEO of GPB Capital, and Jeffry Schneider, the owner of GPB Capitals placement agent Ascendant Capital, lied to investors about the source of money used to make an 8% annualized distribution payment to investors.