Due to the general nature of its content, it should not be regarded as legal advice. During this conversation, Jack and Amrita may make forward-looking statements, including about Block’s preliminary expectations for its financial performance in the second quarter, that are subject to certain risks and uncertainties. Please take a look at Block’s most recent filings with the SEC for a discussion of the Company’s risk factors and for reconciliations of Non-GAAP metrics to their most directly comparable GAAP financial measure.
- Since these companies have a very small following, it means that a short-seller can publish a report to just to push the report lower.
- But you should make your decision based on its fundamentals and the outlook for the business, not what a biased short-seller report says about the company.
- While the short-sellers surely had a point (the business model of reselling physical game disks was reaching it’s expiration date), their bet did not go as expected.
- However, Carl Icahn, a richer investor was in the other side of the trade.
- Famous US short-selling attacks include Luckin Coffee and DraftKings but the activist short-selling strategy has also proven successful in certain EU markets; for example, in the UK and Germany.
The new rule states that short-selling is forbidden when a stock is down by 10% in a session. In that period, shorting is only permitted when the price is above the current best bid price. As Block’s stock price surged more than 600% during the pandemic, Hindenburg notes that Block co-founders Jack Dorsey and James McKelvey sold more than $1 billion worth of shares. The firm also accuses Block of blacklisting individual accounts that were found to have committed fraud, but not blacklisting users who had opened dozens of other accounts that they were allegedly using for criminal activity. The claim I found most ridiculous was that the company has hired an inexperienced CFO for the sake of signing off on questionable financial statements, and that having many CFOs in a short time span is concerning. Last year, COVID-19 vaccine maker Moderna had a CFO depart after just one day on the job.
And it’s certainly not necessarily a sign of fraud or anything that C3.ai is doing wrong. This is a metric investors should watch for in future quarters, however. We have collected all short-selling recommendations from both Hindenburg and Muddy Waters. We double checked using the Web Archive if any content had been removed (none had!). We then collected price data from our usual data source (Norgate Data), because it’s crucial to also get your hands on delisted stocks. In case of the few non-USD stocks, the prices were converted to USD.
A near-67% gross margin is by no means high for a business that relies heavily on subscriptions — approximately 90% of C3.ai’s top line comes from subscription revenue. This is something investors should undoubtedly keep a close eye on. But at the same time, it could be a handful of receivables that are causing the damage and the company may be due to collect on them in the near future. Even with passive investment vehicles like ETFs, investors are often dazzled by environmental and social claims, without having enough knowledge of the businesses they are investing in.
The short-sale rule
Of that 65% came from transaction fees, 22% from its subscription and software business, 2% from hardware like the Square Terminal, and the rest from Bitcoin, according to a Securities and Exchange Commission filing. “We are a highly regulated public company with regular disclosures, and are confident in our products, reporting, compliance programs, and controls,” the statement continues. Notorious short-selling firm Hindenburg Research has Square parent company Block Inc. in its crosshairs, accusing the company of fraud, predatory practices, and inflating user counts in a report released Thursday morning. While the high receivables balance is a bit of a concern, that’s the only item that investors should be worried about — and that may end up being a temporary issue. C3.ai is a company with a lot of potential, and it does have some risk.
You must click the activation link in order to complete your subscription. Since 2019 the picture looks more green overall with a few stocks up more than 100%. It’s not known how much the short-sellers lost but you can assume that the losses were substantial.
What is a short-seller report?
He has been in the market since 2008 and working with Amibroker since 2011. Short seller reports provide an excellent time to short or even buy a stock. They tend to be high-volume periods where market participants start to reposition their investments. Short-sellers are those market participants that make their money by identifying shorting opportunities.
- Block makes money on Bitcoin when it buys and then sells it to users through its Cash App.
- But by the second half of 2020, things had started to turn around.
- This is the most common approach partly because the maximum loss you can have is zero.
- Short-sellers are those market participants that make their money by identifying shorting opportunities.
Research and estimates based on publicly available data should not as such be regarded as insider information but undisclosed information that provides views from a recognized market participant could potentially constitute insider information. Even if the concept of short-selling activism is relatively new in Sweden, it has been used successfully for many years in other markets such as the US. Famous US short-selling attacks include Luckin Coffee and DraftKings but the activist short-selling strategy has also proven successful in certain EU markets; for example, in the UK and Germany. The most notorious example is probably Wirecard, which was later proven to have serious accounting issues. Regulatory risks, accounting issues, undisclosed information, odd related-party transactions and similar problems are examples of “findings” that are usually pointed out in the research reports published by activists.