Muddy Waters is short shares of AppLovin, and alleges that the company engages in deceptive ad-targeting practices that violate platform terms of service, putting it at risk of deplatforming. The report claims APP illegally extracts user data from platforms like Meta, Snap, TikTok, and Google to create Persistent Identity Graphs, enabling precise ad targeting without consent. By using these data-driven techniques, APP allegedly inflates its advertising performance, particularly in e-commerce, where its incrementality is far lower than advertised. The report also highlights a high client churn rate of 23% in Q1 2025, contradicting APP’s CEO’s claims. Given its reliance on potentially illicit data practices, Muddy Waters warns that APP's business model is unsustainable, and if not deplatformed, competitors could replicate its tactics, further eroding its competitive edge.

Culper Research is short OSI Systems, alleging the company’s reported revenue surge in Mexico is misleading and largely fabricated, driven by its troubled contract with Mexico’s Ministry of Defense. While OSI claims to have installed most of the contracted screening systems, Culper’s investigation found that a majority of the equipment is either missing, non-operational, or not yet installed, suggesting OSI prematurely recognized $162 million in revenue. The firm also highlights ballooning unbilled receivables and past audit concerns about revenue recognition. Additionally, OSI is reportedly under intensifying scrutiny by the U.S. Department of Justice (DoJ) for potential FCPA violations involving bribery and corruption in both Mexico and Central America, including connections to controversial figures tied to organized crime. Despite these serious risks, OSI has made vague disclosures about the investigations. The report questions the integrity of OSI’s leadership, noting CEO Deepak Chopra’s retirement announcement and $70 million in insider stock sales.

Kerrisdale Capital is short IonQ, a $5 billion quantum computing company, arguing that its valuation is inflated by retail investors chasing hype. Despite claims of exponential growth, IonQ faces severe scaling challenges, particularly in its reliance on photonic interconnects - an underdeveloped technology essential for linking its computing modules. The report highlights IonQ’s lack of transparency, pointing to unfulfilled promises, questionable technical milestones, and concerns from industry experts about its viability. It also criticizes former CEO Peter Chapman for overstating progress and misleading investors about the company’s capabilities. With a history of overpromises, ongoing cash burn, and executives selling shares, Kerrisdale warns that IonQ is far from achieving true commercial success and will struggle to compete with better-funded players in the quantum computing space.

Culper Research is short AppLovin, alleging that the company's soaring stock price is based on misleading claims about its AI technology, AXON 2.0. The report argues that AppLovin’s recent mobile gaming growth is driven by deceptive ad practices, including silent, backdoor installations of apps without user consent, a tactic that directly boosts its revenue. Additionally, the report accuses AppLovin of manipulating its e-commerce initiative by carefully selecting advertisers and inflating its impact through controlled narratives. The report further details how AppLovin exploits OEM and carrier partnerships to pre-install its AppHub software, granting it powerful “direct download” permissions that bypass Google Play safeguards. By embedding a hidden permission within popular games like Subway Surfers and Angry Birds 2, AppLovin enables advertisements to force-download apps onto users' devices without explicit approval. Culper highlights widespread user complaints and whistleblower statements, arguing that AppLovin’s practices violate Google’s policies and amount to a large-scale ad fraud scheme. The firm says its business model is unsustainable and could result in significant regulatory and investor fallout.

Fuzzy Panda Research alleges that AppLovin has built its success on ad fraud, data theft, and exploitative practices that violate the policies of Apple, Google, and Meta. The report claims AppLovin’s Axon 2.0 algorithm facilitates ad fraud by manipulating ad auctions, reverse-engineering Meta’s data, and inflating click-through rates with deceptive practices such as ads that click themselves or mislead users into installations. It further accuses AppLovin of illegally tracking children, assigning unique identifiers to minors, and collecting their data in violation of privacy laws. The report also highlights a suspected "direct download" program, uncovered by Culper Research, which allegedly allows AppLovin to install apps onto Android devices without user consent, raising concerns about its revenue model. Given these allegations, Fuzzy Panda predicts regulatory action from Apple, Google, and Meta, which could threaten AppLovin’s ability to operate on major app platforms.

Bleecker Street Research is short Rocket Lab, arguing that the company has misled investors about the timeline and viability of its highly anticipated Neutron rocket. While RKLB claims Neutron will launch in mid-2025, Bleecker's interviews with 23 industry experts and internal document reviews suggest a more realistic timeline is mid-2026 to mid-2027. The report points to major delays in engine development, production, launch pad construction, and logistics, all of which undermine RKLB’s ability to secure lucrative government contracts like those from the National Security Space Launch program. Additionally, the only announced Neutron customer is a financially shaky startup, E-Space, and RKLB may be selling launch slots at steep discounts despite claiming otherwise. Bleecker warns that RKLB faces a looming liquidity crunch, with just $504 million in cash and estimated costs of $300–$600 million to complete Neutron. Without Neutron, the company’s Electron rocket and Space Systems division cannot justify its $11.2 billion valuation, especially as SpaceX continues to undercut Electron’s market.

On January 16th, 2025, Kerrisdale Capital released a short report on Applied Optoelectronics, alleging the company has misrepresented its prospects in next-generation 800G transceivers. While AAOI has claimed qualification processes representing $500–$600 million in revenue, Culper’s research—including interviews with former employees, industry experts, and hyperscale customers—suggests otherwise. AAOI allegedly failed to ship 800G samples on time, missing key qualification windows with major customers like Meta and Amazon. Sources indicate that Amazon was particularly frustrated with AAOI's inability to meet production promises, while Microsoft has already shifted its 800G sourcing to competitors like InnoLight and Lumentum. Despite management’s claims of an imminent revenue ramp-up, AAOI has yet to disclose a single confirmed 800G customer and has already delayed expectations by three quarters. Culper also raises concerns about AAOI’s manufacturing capabilities, citing failed attempts to sell its Chinese facilities, an empty expansion site in Taiwan, and high U.S. production costs. The report highlights AAOI’s history of overpromising, drawing parallels to its 2016-2017 100G transceiver hype, which ended in a stock collapse and fraud lawsuits. Insiders, including the CEO and CFO, remain in place despite these past issues and have recently engaged in significant stock sales. With a damaged reputation and operational setbacks, Culper argues AAOI is unlikely to compete effectively in the 800G market and that its stock is poised for a steep decline.

Kerrisdale Research is long shares of ACM Research. ACM Research (NASDAQ: ACMR) is a high-growth semiconductor wafer fabrication equipment (WFE) company with U.S. headquarters but primary operations in Shanghai. It is China's leading supplier of wafer cleaning tools and a major beneficiary of China's push to develop its domestic semiconductor industry in response to U.S. export restrictions. As China directs resources toward national WFE champions, ACMR is poised for rapid growth, with the potential to expand beyond China into global markets. ACMR has already achieved 10x revenue growth over six years, and with increasing U.S. restrictions, its strategic importance to China continues to rise. The company is expected to dominate wafer cleaning tools while expanding into complementary semiconductor equipment markets. Despite these strong growth prospects, ACMR is significantly undervalued in the U.S. Its Chinese-listed subsidiary, ACM Research (Shanghai) Inc. (ACMS), trades at a $5.9 billion market cap and 6x 2025 revenue, while ACMR’s U.S. market cap is only $1.2 billion, implying a 300% upside potential. Investors buying ACMR at current levels could see 10x returns as its valuation corrects.

On January 16th, 2025, Kerrisdale Capital released a short report on Red Cat Holdings, a military drone manufacturer. Red Cat has surged in value by $900 million in anticipation of a U.S. Army Short Range Reconnaissance contract. However, Kerrisdale Capital argues this growth is based on unrealistic expectations. The Army's SRR budget for 2025 is just $25 million, far below Red Cat's claims of an $80 million annual contract and a $400 million total over five years. The Army also plans to refresh SRR models frequently and may switch contractors, undermining Red Cat's portrayal of a sole-source deal. Red Cat's claims of a massive follow-on market are equally dubious. U.S. military branches like the Air Force and Marines have limited demand or preexisting programs, and government agencies like Customs and Border Patrol have minimal drone procurement budgets. Promised NATO sales have failed to materialize, as European buyers favor cheaper Chinese drones or domestic suppliers. Operationally, Red Cat lacks capacity for large-scale production. Despite promises since 2022, it has invested little in mass-production facilities and assumes an implausible threefold increase in manufacturing efficiency by 2025. The Edge 130 drone, acquired in 2024, is still a prototype with no production history. Red flags include the resignation and stock sales of key executives, including the developer of the SRR-winning drone. With overstated projections and shaky fundamentals, Kerrisdale Capital predicts Red Cat's lofty valuation will soon collapse.

Muddy Waters Research is short FTAI Aviation due to what it claims are highly misleading financial reporting practices. The report alleges that FTAI is inflating the size of its aftermarket aerospace business by misrepresenting whole engine sales as individual module sales, thereby exaggerating its maintenance, repair, and overhaul revenue. Muddy Waters estimates that around 80% of FTAI’s Aerospace Products adjusted EBITDA stems from gains on asset sales rather than true maintenance or parts sales, making the segment appear more profitable and robust than it actually is. The firm also accuses FTAI of artificially boosting its EBITDA margins by over-depreciating leased engines, then transferring them to Aerospace Products at reduced book values to generate higher margins upon resale. Additionally, FTAI is suspected of engaging in channel stuffing, allegedly executing questionable aircraft sales in late 2023 to inflate revenue figures. Fortress, FTAI’s former parent company, is said to have capitalized on this inflated narrative by selling significant stock in a secondary offering in May 2024. Muddy Waters’ analysis, backed by industry experts, suggests that FTAI has sold approximately 70 whole engines in the first nine months of 2024, which were misleadingly recorded as 210 module sales. The report further argues that FTAI’s profit margins are abnormally high compared to industry peers, including Boeing and GE Commercial Engines, due to aggressive accounting tactics. The company allegedly depreciates leased engines even when they are not actively in use, lowering their book value before transferring them to the Aerospace Products inventory. This maneuver allows FTAI to report artificially low costs of goods sold (COGS) and, consequently, inflated gross margins. Muddy Waters also accuses FTAI of engineering a last-minute 2023 aircraft sale through an intermediary, Aerolease, using a promissory note instead of an actual payment, suggesting that the deal was structured to fabricate revenue. Ultimately, the report asserts that FTAI is not a true MRO business but rather a glorified engine trading and leasing company relying on unsustainable financial practices to maintain an inflated valuation.

On January 2nd, 2025, Hindenburg Research released a short report on Carvana, an online car dealership company. Carvana has seen a 284% stock surge in 2024, despite past bankruptcy risks. Hindenburg’s research indicates the turnaround story is illusory, fueled by lax underwriting, accounting manipulation, and related-party transactions. According to Hindenburg, the company sold $800 million in loans to a suspected related party and relies heavily on subprime auto loans, with delinquencies surpassing industry averages. Meanwhile, Carvana faces macro challenges, including a 20% decline in used car prices since 2021 and reduced support from key partner Ally Financial. Insiders, including CEO Ernie Garcia III's father, Ernest Garcia II, have profited by selling billions in stock while solvency risks persist. Allegations include inflating profits through favorable deals with related-party DriveTime and questionable loan practices. Despite modest net income growth, Carvana trades at exorbitant valuations compared to peers, raising concerns about its sustainability amid mounting debt, market headwinds, and ongoing scrutiny of its practices.

On December 20th, 2024, Hindenburg Research released a short report on Sezzle Inc., a "Buy Now, Pay Later" (BNPL) company. The report criticizes Sezzle's business practices and financials, painting the company as a failing platform using short-term tricks to boost its numbers while insiders cash out. Hindenburg claims Sezzle's recent stock surge is not rooted in fundamentals. The company is borrowing expensive capital to make risky loans, while both customer and merchant numbers are in rapid decline. The report highlights that Sezzle’s CEO and Chairman have pledged $542 million worth of shares for a margin loan, representing 30% of the company’s shares, with insiders selling approximately $71 million in stock this year. Sezzle has increasingly relied on risky, high-interest loans—borrowing at 12.65% to lend to high-risk consumers—and its provisions for bad debt have ballooned 130%. Merchant partnerships are falling apart, with only 23,000 active merchants remaining, a 51% drop since 2021. Additionally, the company has faced rising customer complaints, leading to a low 1.1-star average rating on the Better Business Bureau database.

Culper Research on December 6th, 2024 released a short report targeting the consumer loan lead generator LendingTree. LendingTree engages in generating leads of potential mortgage loan consumers for mortgage originators. Culper believes that LendingTree faces two existential risks that it has downplayed to its investors: an ongoing lawsuit and January 2025 FCC rule changes that will make it much harder for the company to generate leads. The lawsuit is a class action suit by consumers who used one of LendingTree’s sites to search for insurance or mortgage rate quotes, but then were bombarded by various companies with calls and text message spam. The trial date has been set for November of 2015 and could cost LendingTree $500-$1,500 per violation. The FCC rule change will close a loophole allowing lead generators like LendingTree to use robocalls and robotexts. Without this ability, LendingTree may not be able to generate the leads which it sells to financial companies. Culper believes that these existential risks have been contributed to the company losing its COO and CFO in the last 18 months and the current GC having sold all of her shares in the company.

Fuzzy Panda Research on November 26th released a short report targeting the radioactive isotope company ASP Isotopes, a company that produces radioactive materials for the pharmaceutical, semiconductor, and green energy industries. Fuzzy Pandas believes the company is a stock promotion scheme with no viable proprietary technology. They found instances of ASP paying known stock promoters to promote the stock. They also cite the fact that two previously convicted fraudsters appear to be heavily involved in the company, and are invested in the company indirectly. Fuzzy Pandas says their research indicates that ASP does not have any economically viable proprietary technology and holds no patents. They also failed to verify the existence of certain of ASP’s claimed subsidiaries.

Muddy Waters Research on November 20th released a short report targeting the affordable cosmetics brand e.l.f. Beauty, accusing the company of inflating revenue to prop up its share price. Muddy Waters says the company’s recent explanation of how nearly $40 million of inventory suddenly showed up on its balance sheet is not supported by Muddy Waters’ conversations with former e.l.f. suppliers. Muddy Waters has also analyzed e.l.f.’s US imports and believes that a steep decline in imports from China implies the company’s COGS and thus revenue and profits are overstated. Muddy Waters believes the company may have overstated revenue over the last three quarters by $150 million. They cite sales growth incentives as a motivation for management to have perpetrated these misstatements.

Fuzzy Panda Research on October 16th released a short report on Stride Inc, a K-12 online education company. Fuzzy Panda believes that Stride has been misleading investors about the source of its post-Covid profits and is overpriced as a result. Fuzzy Panda claims their own research and analysis shows that the company received a ~$330 million benefit from federal Covid relief for education institutions, which ran out in September. They also claim Stride has engaged in shady business practices to inflate their enrollment in order to charge state governments more money for their services. These states have begun to drop Stride and ban them, according to the report. Fuzzy Panda believes that given these short-term challenges and a stock price that is up 60% in the past year, the stock is a short.

Hindenburg Research on October 8th released a short report on Roblox Corp, an online gaming platform where independent game developers can create video games targeted at children. Hindenburg alleges that Roblox has become a dangerous place for children, harboring pedophilia, violence and sexual content. Additionally, Hindenburg believes Roblox is inflating its own usage metrics by representing Daily Active Users (DAUs) as unique “people” even though DAUs can be bots, or non-primary accounts of real people. Hindenburg’s research uncovered evidence of significant bot activity on the platform. They also believe that these bots and idle users account for a large proportion of the company’s reported engagement hours. Finally, Hindenburg cites the company’s mounting losses, recent departures of key executives and insider selling.

Culper Research is short shares of Kaspi, a payment network and the second largest bank in Kazakhstan. Culper believes that Kaspi, contrary to its public statements, has a large business dealing with Russian clients, including significant ties to criminals and money laundering activity. This shady Russian business exposes the company to the risk of delisting in the US. Furthermore, the company’s stock is expensive on metrics including price per user and price to revenue, relative to peers including its closest Kazakh competitor. Culper provides evidence for the company’s business in Russia, including testimonials from Russian consumers opening Kaspi accounts. Culper also refers to a former 30% shareholder who was convicted of money laundering through Kaspi accounts to purchase property in Russia.

Fuzzy Panda Research says Napco Security Technology is an overvalued company that has been committing accounting fraud to boost their revenue numbers. They reference a recent employee lawsuit that alleges the CFO and senior management overstated inventories and understated COGS to inflate net income. They also say that the company’s revenue is set to deteriorate. Sales of the company’s Intrusion and Access Alarm systems have been declining, a leading indicator of a decline in recurring revenue. Additionally, insiders at the company have been dumping stock. The CEO and CFO have sold over $200 million, or 70-80% of their holdings, of the stock in the last 15 months. Finally, they conclude that the company’s reported 90% gross margins are infeasible due to the company’s lack of pricing power, and the true cost of goods sold may be hidden on the company’s balance sheet. A one-time boost from a 3G upgrade cycle and a temporary product innovation will further weigh on revenue.

Bleecker Street says that Fitell Corp is a tiny business running a stock promotion. They say Fitell is trading at 60 times trailing revenue due to stock promotion groups they found on WeChat and WhatsApp. They further allege that the company has ties to past stock promotion schemes, some of which have ended up with jailed directors. In particular, the majority shareholder in the company owns intellectual property rights in Australia for what appears to be a logo of a now-defunct stock promotion called Healthzone. They have also made a $2M loan to a company that had been dissolved for two years. Finally, Fitell’s auditor is no longer doing PCAOB-compliant audits with other companies since 2023, although Fitell has made no disclosure about this.

Hindenburg claims that iLearningEngines is reporting fake revenues and expenses with help from a questionable accounting firm and a desperate SPAC sponsor. They say the company was nearly insolvent when it went public via SPAC earlier in 2024, but now claims that they have significant revenues. Hindenburg alleges that the company lied to the SEC that a certain “technology partner” was not a related party. Instead, they say this entity has unusual and suspicious business arrangements with iLearningEngines and overlapping leaderships employees and shareholders. This may be being used to falsify financials. Hindenburg says despite the company claiming hundreds of millions of dollars in annual revenue run rate in India, in reality it has less than 1% of that figure. Additionally, the company’s auditor has a track record of failing to uphold basic auditing standards.

Hindenburg has initiated a short position in enterprise server maker Super Micro Computer due to red flags regarding revenue recognition, related party transactions, international trade regulation failures, and issues with customer relations. Super Micro in 2020 was charged by the SEC for widespread accounting violations surrounding improper recognition of revenue, leading to hefty fines and resignations of key senior leaders in the company. However, in recent years, Super Micro appears to have rehired many of the people involved in that scandal. Since then, Super Micro has paid nearly a billion dollars in circular transactions to companies controlled by the Super Micro CEO’s brothers. Additionally, Super Micro appears to have been exporting some products to Russia, against US sanctions. Customer relations also appear to be deteriorating due to poor customer service, and the company has been losing share and key customers to Dell.

Kerrisdale is short shares of Lumen Technologies, a telecommunications company that provides internet connectivity and is the merger of several smaller carriers and internet providers. They say that Lumen is a deteriorating business that has gained an overvalued stock price due to public headlines about AI and a recent $5B sales deal. Kerrisdale says the deal is only worth less than $1B after estimated costs, plus $21M in annual recurring revenue. They say the company’s buzzy headlines portraying itself as an AI infrastructure play are overhyped because their main customer pipeline consists of large enterprises in healthcare, banking, retail etc. that will rely on cloud AI use cases for the foreseeable future. Meanwhile, Lumen’s legacy business is deteriorating. Despite these headwinds, the stock has popped to a valuation similar to Verizon and AT&T, leading Kerrisdale to view it as overvalued.

Bleecker Street Research is short Gogo Inc, a technology company that makes internet connectivity systems for private jets. Gogo is currently working on upgrading its private jet internet connectivity offering from 3G/4G to 5G, a project which Bleecker Street says is pivotal to the stock’s current valuation and revenue growth projections. However, Bleecker Street claims that the process of transitioning to 5G is going worse than the company has indicated. The project has suffered multiple delays since 2021, currently depends on two small companies facing major existential challenges themselves, and has not been fully disclosed to investors, according to Bleecker Street. In particular, the technical implementation of the system depends on one SPAC company that is going through bankruptcy and another small SPAC company that is itself cash-strapped. Meanwhile, Starlink is making inroads into the business aviation internet market, making continued delays detrimental to Gogo.

Bleecker Street Research is short Dave, a fintech company in the business of payday lending. Bleecker Street claims that the practice of prompting users for “tips” is a central part of the company’s bottom line. Meanwhile, this practice is a “dark pattern” that the Consumer Financial Protection Bureau is honing in on for increased regulation. Specifically, the CFPB has called out payday lenders asking for tips, and wants such lenders to be subject to consumer loan regulations. Taking into account the tips, the APRs Dave charges puts them in loan shark territory and thus likely noncompliant with such regulations. If Dave is forced to scale back these practices, their bottom-line will deteriorate significantly. Bleecker Street is short the stock due to this regulatory risk as well as high net charge-offs inherent to its payday loans.

Culper targets Iris Energy as another crypto mining company deceptively touting its plans to build itself into a premier AI datacenter company. Culper alleges that Iris has inflated the value of its assets, including by mis-quoting a Morgan Stanley report. In reality, their locations have unfavorable infrastructure for premier AI data centers, including limited fiber internet connectivity, and Iris does not seem to be investing as much money into their hardware as other cloud providers, including the water-cooling solutions required by the latest generation NVIDIA chips. Culper says other cloud providers spend 10 times as much money per MW of operating power compared to Iris. Concurrently, the company has increasingly been diluting shareholders to fund cash burn. Since the beginning of 2024, they have increased their share count by 150%. Culper says the combination of an imploding business, extreme equity dilution and a richly priced stock prime the stock to go down.

Muddy Waters alleges that Eurofin’s financial reporting consists of inconsistencies and oddities that suggest the possibility of financial malfeasance. They allege that although Eurofin reports significantly higher revenue per employee (~50%-70% higher) and compensation expense per employee (~30% higher) than industry peers, Eurofin in reality pays near the bottom of the industry. Eurofin’s accounting also obscures subsidiary cash balances and cash flows and seems designed to confuse auditors. Additionally, Muddy Waters alleges that Eurofin has engaged in a series of unfavorable related party transactions that have enriched the commercial real estate portfolio of a key executive. These transactions have consisted of unfavorable acquisitions of companies who own real estate, then selling the real estate to the related party for below-market prices. The related party then charges above-market rents to Eurofin, the only meaningful tenant of the related party’s CRE portfolio.

Culper alleges that Axsome Therapeutics, producer of the Auvelity depression treatment, is engaging in a scheme that has led to falsely inflated reported revenues. They allege that Axsome benefits from “dodgy” pharmacies that fill Auvelity prescriptions without properly submitting legitimate claims to the insurance payors. This leads to a large amount of recognized revenue that will never be paid due to claims being rejected by the payors. The reason for the rejections is a combination of exorbitant pricing of Auvelity and the non-proprietary nature of the treatment. Because of these factors, many payors who cover Auvelity require proof of failure of other drugs before covering Auvelity. Culper claims the large volumes of claims rejections has led to a discrepancy between Axsome’s reported revenues and receivables, which implies that much of their revenue should be restated lower. They cite the dismissal of Axsome’s auditor EY in 2023 and multiple recent audit issues as corroborating evidence for foul play.

Kerrisdale Capital alleges that Riot’s bitcoin mining operations are value-destructive and the company has only been able to operate thanks to equity raises which dilute shareholders. Despite increasing its Bitcoin holdings, the number of Bitcoins Riot owns per share has actually decreased over the past couple years. About 12% of Riot’s revenue comes from power curtailment credits where Riot can get paid by the public energy grid in Texas when it voluntarily shuts down its operations during times of high demand. Kerrisale believes that in their current form power curtailment credits may not be in the best interests of Texas utility payors. Therefore there is risk that the Texas authorities revise the power curtailment schemes in a way that is less favorable to Riot. Finally, Kerrisdale Capital doubts Riot can compete in the long-term with foreign Bitcoin miners (Argentine, Ethiopia, UAE, Russia, etc.) which in many cases have lower electricity costs, lower labor costs, and less environmental / construction regulations.

Based in Japan Lasertec produces extreme ultraviolet lithography (EUV) machines which it sells to semiconductor manufacturers, mainly TSMC, Intel, and Samsung. Lasertec’s EUV machines are allegedly so faulty that many customers refuse to accept delivery of them. Lasertec allegedly recognizes pre-payments on these machines as revenue even when they have not been delivered to customers. In 2022 Lasertec announced a new R&D and production center in Yokohama, Japan. In June of 2023 the company claimed the first round of construction was completed. As of May of 2024 Scorpion claims the Yokohama facility is almost deserted with very little signs of activity. Scorpion Capital alleges Lasertec has a large number of finished goods sitting as unsold inventory, this runs contrary to the company's claim that all its inventory is "work in progress". Scorpion believes Lasertec will eventually be forced to recognize large inventory write-downs.

Hindenburg alleges that Axos, a California regional bank, has a much riskier loan book than it has led investors to believe. They allege that the company has lent money to risky borrowers, including felons and high risk commercial real estate projects. Despite this, Axos has sold investors on a story that they have superior underwriting standards and a portfolio of above-average performing loans. This has resulted in a premium multiple versus book value versus its peers. Since inception, the company has benefited from an asset-light digital strategy and grown rapidly. However, much of the growth is due to Axos taking on outsized risk with commercial real estate and multifamily housing loans. These cause Axos to take on more risk than its peers. Despite this, the company’s reported metrics paint a picture of a much lower-than-average risk profile, for example with suspiciously low reported average loan-to-values. Hindenburg believes that as large portions of Axos’ loan book come due for refinancing at higher interest rates, Axos will be forced to increase credit loss provisions.

Lithium Americas (LAC) is a pre-revenue mining company. It owns land in Nevada from which it intends to begin mining lithium in 2028. LAC plans to use the clay extraction method of lithium mining. This is far more costly than the brine and hard-rock extraction methods used by nearly all operationally lithium mines today. At current lithium prices LAC’s Nevada mine will not be commercially viable. Despite receiving a loan from the Department of Energy, Bleecker Street believes that LAC will be obliged to conduct significantly dilutive equity raises to fund the mine's completion.

Global Life is a life and health insurance company. Their biggest subsidiary American Income Life (AIL) accounts for 39% of their premiums and 50% of their profits. Fuzzy Panda alleges widespread fraud among AIL’s sales agents. For example they write life insurance policies for dead people, forge signatures for existing customers to add additional policies that were not approved, mislead customers about the costs and benefits of policies, create fictitious bank accounts to create fake policies for customers who do not exist, and help customers who smoke cigarettes lie to say they are non smokers. In some cases they are committing fraud against the customers, in other cases they are committing fraud against the company. Either way it allows the agents to write more policies and earn more sales commissions. Fuzzy Panda also accuses Global Life of engaging in unethical tactics to recruit sales agents and maintaining a toxic work culture that enables sexual misconduct.

Sealed Air makes plastic that is used to wrap packaging. One of their main end markets is e-commerce. E-commerce companies including Amazon use their plastic as fillers to protect items in boxes.Amazon is also moving away from Plastic packaging and instead using paper which is much better for the environment. Their other main market is food packaging. Sealed Air uses a type of plastic called PVDC which was just banned in California due to environmental concerns. Other companies have started using more environmentally friendly EVOH packaging. They will likely take market share from Sealed Air.

MicroStrategy is a software business that also owns a large amount of Bitcoin. The company currently has a market capitalization of $32 billion. The software business only generates $10 million of free cash flow per year so substantially all of the value of the company is its Bitcoin holdings. Adjusting for in the money convertible notes MicroStrategy has 19.9 million shares outstanding. At the current share price of $1,615 that’s a $32 billion market capitalization. Adjusting for the conversion of in the money convertible notes they have $1 billion of net debt. This brings the enterprise value up to $33 billion. They currently own 214,246 Bitcoins. At the current Bitcoin price of $66,947 the value is ~$14 billion. Thus, MicroStrategy’s enterprise value is 2.36 times greater than the value of their Bitcoin holdings. Kerrisdale suggests shorting shares of MicroStrategy and buying shares of Bitcoin ETFs to hedge.

The Bancorp is a financial company that owns $2 billion of bridge loans tied to residential real estate. The Bancorp claims that they have no substantial risk of default. Culper Research believes this is wrong. For example, one of the loans is related to an apartment building in Texas which is being sued related to a shooting at the property and is only 47% occupied. The borrower has not made required interest payments to The Bancorp for the past 3 months. Many of the properties The Bancorp has lent money to are in dilapidated condition and some have even suffered fires and are condemned, meaning they cannot accept tenants. Furthermore, with rising interest rates, it will likely be difficult for many borrowers to refinance their loans when they come due. The Bancorp only has $4.7 million of loan loss reserves for $2 billion of loans, which Culper Research views as way too low.

Equinix is a data center REIT which owns and operates data center buildings which it leases to enterprise clients. Most REITs are valued based on their adjusted funds from operations (AFFO), which is basically cash flows from operating activities minus maintenance capex. Hindenburg alleges that to manipulate AFFO, Equinix misclassified maintenance capex as growth capex. As one example, batteries in the data center go bad and need to be replaced over time. Equinix classifies the replacement cost as growth capex despite the fact that replacing the batteries is necessary to maintain their existing capacity. Hindenburg additionally alleges that Equinix misclassifies operating expenses as capex. They do this by bundling a bunch of small purchases together to reach the threshold for classifying it as capex. Finally, Hindenburg believes Equinix's core business is being disrupted by cloud service providers like Amazon, Microsoft, and Google which are increasingly offering cloud-based offerings which can operate in their own data centers, with no need to be co-located on Equinix's.

AirSculpt is a plastic surgery company focused on fat removal. According to Fuzzy Panda, AirSculpt’s fat removal operations are far more dangerous than they want their customers to believe. In 2022 a San Diego woman died three days after receiving an AirSculpt treatment. Multiple other patients suffered severe medical issues. Many of AirSculpt’s doctors are under qualified with more than 35% of them lacking board certification. Many before-after photos of patients are photoshopped. In some cases AirSculpt has its employees post as patients in their promotional videos. AirSculpt claims to have a patented fat removal method but their claimed patent does not appear to exist. Fuzzy Panda believes they use industry-standard fat removal procedures.

In April of 2023 ACADIA launched Daybue, a drug to treat Rett Syndrome. Rett Syndrome is a rare genetic mutation affecting brain development. Culper believes Daybue’s side effects are much worse than ACADIA claims, with 1 in every 10 patients ending up needing hospitalization. In ACADIA’s clinical trial, only 13% of patients saw “much improvement” in their symptoms. Given the low efficacy and significant side effects, many patients are now refusing to take the drug. Evidence from social media suggests patients and their families are losing interest in Daybue. Many of them have tried it and gave up after not seeing any positive results. Given the lackluster efficacy, insurance companies may also stop covering it.

Temenos is a Swiss-listed company that makes software for banks. Hindenburg alleges that Temenos has been artificially inflating its revenue and earnings through accounting tricks. For example, in 2021 they bought $20 million of convertible bonds from a FinTech company called Mbanq. At the same time Mbanq agreed to buy $20 million of Temenos’s software to resell. This round-tripping transaction allowed Temenos to recognize $20 million of revenue. Temenos frequently offers discounts to customers to renew contracts early or backdated deals signed after quarter end to manipulate the timing of revenue recognition and meet analyst expectations. Temenos claims to invest heavily in R&D but much of the supposed R&D spend is actually customer implementation costs which should be categorized as cost of goods sold. Furthermore, it capitalizes much of its R&D expenditures and amortizes them over 7 years which Hindenburg thinks is unreasonably long. Temenos’s sales tactics are overly aggressive. They over-promise and under-deliver to their customers, leading to poor retention.

Altimmune is a pharmaceutical company developing a weight-loss drug called Pemvidutide. Pemvidutide is a GLP-1 agonist, similar to Novo Nordisk’s hit drug Ozempic. In December of 2023 Altimmune reported that patients using their drug lost 15.6% of their weight at the end of 48 weeks. Novo-Nordisk’s Ozempic and Eli Lilly’s Mounjaro already perform significantly better than this. In Altimmune’s trial, 36% of participants discontinued treatment early, likely due to side effects. For comparison, in Novo Nordisk’s semaglutide trial (Ozempic) and Eli Lilly’s tirzepatide trial (Mounjaro), only 17% and 15% of patients dropped out respectively. Pemvidutide is inferior to two existing weight loss drugs already on the market, both in terms of effectiveness and side effects. Thus, even if Pemvidutide does receive FDA approval, it is unlikely to be a commercial success.

Fairfax Financial is a Canadian insurance company. It uses its accumulated insurance premiums to make investments and generate returns. A significant part of FairFax’s investment portfolio consists of private companies. Muddy Waters believes FairFax is inflating the values of some of its private investments by failing to recognize impairments even when the operating profits of their portfolio companies decline. Fairfax allegedly also overstates the value of some of their public market investments. For example, they own a stake in a company called EXCO Resources which is publicly traded on the over-the-counter markets. As of the third quarter of 2023 FairFax’s valued their shares at more than double the stock’s trading price in that same period. Sometimes Fairfax’s methods are more sophisticated. For example, when one of their portfolio companies is doing poorly, they will sometimes get another company to acquire it for an inflated price. As compensation Fairfax provides the buyer with favorable debt or equity financing. This allows them to avoid recognizing an impairment in the short term but it leaves Fairfax with risky securities issued by the buyer which FairFax acquired for inflated prices. After stripping out all of these accounting gimmicks, Muddy Waters believes FairFax’s book value is 18% less than the company reports.

LifeStance is a US-based private mental health provider with 6,400 clinicians across 33 states. LifeStance’s revenue has grown rapidly in recent years (+77% in 2021 and + 29% in 2022) as the result of acquiring numerous mental health clinics and hiring thousands of new clinicians. Despite this, the company has struggled with profitability continuing to post EBITDA losses. According to Hindenberg, the poor profitability can be largely attributed to high churn among LifeStance’s clinicians. Contrary to the company’s claims of ~80% retention rates Hindenberg believes the retention rate is only around 72%. This means 28% of LifeStance’s clinicians quit each year. LifeStance pays clinicians a variable rate based on how many patients they see. They give the clinician an advance based on an expected patient volume in the future. If the clinician fails to meet the target they have to pay back the unearned portion of this advance. Clinicians are often enticed to join by high expected salaries advertised by LifeStance. They are dissatisfied when they make less than expected and have to pay back a large portion of their advance. It’s very easy for licensed clinicians to quit and set up their own practice. When they are dissatisfied with LifeStance’s arcane compensation structure and general administrative incompetence they are quick to quit and start working independently.

LuxUrban Hotels (NASDAQ: LUXH) is a small-cap hotel operator based in Miami, Florida. Over the past 2 years they have grown rapidly, from $21 million of revenue in 2021 to $123 million in 2023 (based on their guidance). LuxUrban does not own its hotels, opting for the more capital-efficient method of leasing. According to Bleecker Street, they have grown too fast and are stretched financially thin. As of 9/30/2023 they have just $4.8 million of cash. They have failed to pay rent on multiple of their properties and face an estimated $1.5 million of damages to their landlords. Furthermore, Bleecker Street alleges LuxUrban is over exaggerating its growth. In November of 2023 the company claimed to have signed a lease for two 5-star hotels in New York City. Bleecker Street claims to have contacted the owner of these two buildings in January of 2024. The owner said they had not signed any lease with LuxUrban. LuxUrban claims to charge >$300 per night on average across its hotels. According to Bleecker Street the rates advertised for these hotels on online travel agencies (Trip Advisor, Expedia, etc.) are much lower, around $200. So what’s going on? According to Bleecker Street, LuxUrban has engaged in shady practices such as failing to refund customers who cancel within the free cancellation window. This could explain why their reported revenue per room is greater than their advertised prices.

DocGo is a mobile healthcare company. They employ clinicians who can drive to the patient’s home. The patient has a video call with their doctor / nurse while the DocGo clinician is physically with the patient to help with medical tests etc. They also have a medical transportation service called Ambulnz which is basically a private ambulance service. In May of 2023 DocGo won a $432 million contract from New York City to house and care for thousands of migrant asylum seekers. This was a bit of a strange decision as DocGo does not have experience in providing housing or food to large numbers of people. There have been criticisms of DocGo’s management as they have reportedly wasted hundreds of thousands of dollars worth of food. Additionally, they housed migrants in a hotel managed by the then-CEO’s brother. The New York Attorney General is currently investigating DocGo’s handling of migrant care. According to Fuzzy Panda, given the mishandling of the migrant housing, DocGo is unlikely to receive similar contracts going forward. This will lead to a substantial decrease in revenue once the current contract expires in May of 2024. Additionally, Fuzzy Panda alleges DocGo’s core medical services business is fraudulent. According to former employees, DocGo has on numerous occasions engaged in fraudulent billing to Medi-Cal (California’s state healthcare program), Medicare, and private insurance companies. This includes billing for COVID tests that were not performed, changing patient care reports to bill for more services than were actually performed, bribing poor people to get multiple COVID vaccines as DocGo could bill the government for each one, and operating ambulances without permits.