BearCaution

LKE J Capital is short Lake Resources (LKE ASX)

Lake Resources (LKE ASX) “Lake” is one of several lithium explorers planning to use an unproven direct lithium extraction (DLE) technology to remove lithium from brine. If Lake can get the DLE technology to work then it plans to build a $1 bln processing facility in a remote location in the Andes.Lake is claiming to produce “cleaner lithium.” We believe, however, DLE will still use large amounts of water and produce toxic waste. Lake has failed to get an operational pilot plant on site three years after promising it would. Lake insiders have successfully sold $8.1 mln in stock in the last year. Lake granted 41.5 mln options to financial institutions that published favorable research on the company. Insider share sales have followed a pattern of Lake announcement, followed by favorable research, stock price rise, and then insider sales. I

FFIE Move Over Lordstown: There’s a New EV Scam in Town

We don't think Faraday Future (FFIE), an EV SPAC, will ever sell a car. So far, it's nothing but a bucket to collect money from U.S. investors and pour it into the black hole of debt created by its founder, China's best-known securities fraudster, Jia Yueting.

BOO Yangtze River Port and Logistics

Boohoo’s margins seem too good to be true. One-quarter the size of industry leader ASOS, Boohoo boasts more than double its ebitda and net margins. Meanwhile, Boohoo buys from a blinding array of family-owned companies—and then acquires the companies. Even a sincere effort to keep it all at arm’s length would find the arrangements challenging.

IPO Not Impressed

IP Group has hurried to diversify risk from its biggest asset, Oxford Nanopore, a company that cannot make its technology work but whose valuation has been bloated by successive rounds of investment. Now, facing cash shortages, the company looks to be on the precipice of a major devaluation if not failure. That single company could drag down IPO’s price by 20%.IP Group is an accounting game more than a company and has an atrocious track record of delivering bankable returns.Private investors in IP Group share a collusive interest in creating high paper values for tech concept companies that generally fail. We think the company is worth half its posted value at best.

MARK Remark Holdings (MARK US) May Be the Most Brazen Stock Promote of the Year

Wherever we look, we cannot find a real business behind Remark Holdings. The company changes its business description so quickly that even management struggles to explain. That does not stop them from pushing out press releases that make wild claims for fantastic new technologies to come.

SRNE Sorrento Therapeutics (SRNE): Terminal Patient.

We are aware of one incident where SRNE executives asked Bioserv (a subsidiary) to disregard human safety and ship a contaminated product. Two former employees provided us with a detailed account of an incident in April 2017 when a senior member of management directed staff at the Bioserv subsidiary to ship an injectable drug even though the company knew it was contaminated with glass. Two executives quit in protest over the incident and at least one more was fired, apparently for resisting management’s pressure to ship. Fortunately, the company did not ship the contaminated medicine. We believe Sorrento is a zero. Even if you think that Sorrento’s antibody library and other assets have scientific merit, each requires tens of millions of dollars and, more importantly, clear strategic focus to commercialize. Given the perilous condition the company finds itself in financially, it is hard to understand why any potential acquirer would pay more than fire-sale prices.

CCRC Calling CCRC Where’s Our Money?

Bad bid: We think the recent $16 take-private bid was an attempt to prop up share value. Our interviews in China and the company’s own Nasdaq prospectus suggest that Guangzhou Cornerstone, the company that says it will raise the money for the bid, has little capability to come up with the funding required. ‣ Low profits: We think this call center operator is improperly inflating profits by diverting costs into undisclosed related parties. This could drive up optical results while leaving the shareholders’ cupboard bare. CCRC reports 26% gross margins to U.S. investors and just 12% to its Chinese regulators. The company also reports lower revenue in China than it does in its SEC filings. Net profit reported in China in 2017 was just one-third of that reported in the U.S

FANH Who Owns Fanhua? Not the U.S. Shareholders

Fanhua developed a huge commercial real estate project in the founder’s hometown for more than two years without telling investors. Fanhua has been pre-selling residential units there for delivery in 2020—which puts the company on the hook to spend to build out those units. The project was finally mentioned, in passing, on a November 2018 company conference call. ‣ Investors are skeptical that regulators are doing their job in China—how much of this company’s value has been stolen? Based on the evidence, we believe this company is uninvestable

AOS Hot Water

We believe that AOS underwrites UTP’s loans to distributors. Our interviews, credit reports on UTP and AOS China, and other evidence all suggest that the cash the company has in China is being held as security against bad loans to UTP clients. That would mean that a significant portion of AOS’s cash is stuck in China and at risk of being tapped to cover defaults. Yet AOS has disclosed nothing about the cash and never explained why a region accounting for 34% of company revenue needs to hold 84% of company cash.

BGNE BeiGene, Ltd. (BGNE US) No Cure BeiGene May Be Faking 60% of Sales

BeiGene is still pumping and dumping. With a chaotic, over-priced, and ineffectual R&D program for me-too drugs, BeiGene is trying to excite the market and prop up share price by posting high growth in sales of drugs on behalf of Celgene (CELG). But our research indicates that these sales reports are simply a lie

WTC WiseTech (WTC AU, WTCHF US) Part 1: The Wizard of WiseTech

We demonstrate that WiseTech is using uniquely confusing accounting strategies to exaggerate growth and income. In this first report, we take investors through two steps: we show that, even if you accept the revenue and profit figures WiseTech reports, slowing the management spin reveals that growth is significantly exaggerated. Next, we present evidence that we believe shows WiseTech's figures can't be relied upon and that the company's profit may have been overstated by as much as 178% cumulatively since FY 2016.

ENPH Enphase Energy (ENPH US) Stealing from Tomorrow

We think that Enphase is pulling forward sales and stuffing distribution channels in order to make sales appear better than they are. We have analyzed industry reports and estimate that an amazing seven months of inventory is sitting in distribution channels, versus industry norms of about four to six weeks. We believe Enphase is losing market share in solar inverters

LK Luckin Coffee (LK) The Long and Short of It

We are short Luckin and believe that the work of the anonymous short sellers was credible and complementary to our own analysis of the company’s reports.

GDS GDS: Debt Trap.

GDS is a fraud. At least 25% of its revenue is fraudulent. Unlike most Chinese companies, GDS creates the fake revenue by round-tripping its own debt and capex. As GDS’s revenue line grows, so does the amount of debt it needs to raise to support the illusion.

NG NovaGold (NG US) Pipe Dream

For the last 15 years, NovaGold’s management team has systematically misled investors with subjective presentation of information about a deposit so remote and technically challenging that the mine will never be built. During that time, management has been treating this 12-person concept company like an ATM, awarding themselves base salaries that rival those of the CEOs at Newmont and Barrick and total compensation packages comparable with those at Rio and BHP. If the information from the company’s feasibility studies were presented in a more honest light, investors would understand that the Donlin deposit, of which they own 50%, is not feasible to put into production at any gold price.

IDEX Champion of Promotes

Ideanomics (IDEX) (formerly Seven Stars Cloud Group, Inc. and before that WeCast and before that You on Demand Holdings and before that China Broadband) is a zero. The company changes its name and promotional story so frequently that it’s hard to keep up. One thing remains a constant, despite all the press releases, buzzwords and hype: shareholders get wiped out.

STAA STARR Surgical (STAA) Less Than Meets the Eye

We think that STAAR Surgical has overstated sales in China by at least one-third, or $21.6 mln. That would mean that all of the company’s $14 mln in 2019 profit is fake. A single Chinese distributor accounted for 43% of STAAR’s total sales and 71% of its growth in 2019 and over half in Q2 this year. In the 2019 10K, STAAR reports: “One customer, Shanghai Langsheng [sic], our China distributor who sells in to China and Hong Kong, accounted for more than 43% of our consolidated net sales during fiscal 2019.” Unfortunately, the Chinese numbers (which are not audited 2 ) are unreliable.

NAK Pretend and Extend The No-Return Deposit

We believe Northern Dynasty (NAK US, NDM TO) has crafted a money-losing mining plan to achieve government approvals. Since management is bonused on lobbying success instead of for producing minerals, NAK has no reason to care that the new plan is irrational: we think it will lose money, leave investors with a stranded asset, and be canceled anyway if Joe Biden is elected.

ACMR ACM Research (ACMR US) Dirty business

We believe ACM Research (ACMR) is a fraud, over-reporting both revenue and profit. What real profit the company has is apparently being siphoned off to related parties. ACMR faces a cash crunch even with a reported $86 mln in the bank. ACMR is borrowing at high rates of interest, and the company is pushing to IPO substantially all the company assets in Shanghai in order to raise cash. This will significantly dilute U.S. investors.

CBAT CBAK Energy Technology Inc. (CBAT US) The Undead: CBAT Why China BAK Has Zero Value

CBAK Energy Technology Inc. (CBAT) represents the barely re-animated corpse of CBAK, a Chinese reverse merger that lost all its manufacturing assets to default in 2014.1 In 2015-16, CBAT raised $113 mln from investors to build new factories—and, we will show, appears to have simply taken a lot of that cash.

BTBT Bit Digital, Inc. (BTBT): Criminals and Fugitives.

With key executives in jail or on the lam for having bilked Chinese investors out of $42 mln in a fraudulent P2P business, Bit Digital (BTBT) has moved on to a fake crypto currency business. We will show that the assets probably do not exist, and the business is designed to steal funds from investors.

NEA Nearmap Ltd. (NEA AX) Afraid to Admit Failure

Nearmap Ltd. (NEA AX) repeatedly assures investors it deserves a heady share price because of high growth and coming profits in the U.S. market. Actually, the company is laying off sales staff and offering discounts in a panicked attempt to improve margins, kneecapping its efforts to grow. Nearmap is apparently trying to hide its U.S. failure with accounting tricks to pull forward revenue. Without that seemingly aggressive revenue recognition, we believe revenue growth in the U.S was less than half what was reported.

BTCM BTCM: It Keeps Coming Back Now It's Trying the Crypto-Hoax Space

‣ BTCM has been losing money since 2015, a year after its IPO. We think that’s intentional. ‣ We’ll show that the crypto mining plan is end-to-end hype. ‣ We found that BTCM overstated by 650% the revenue of the offshore lottery business it bought then falsely blamed a regulatory change for plummeting income. ‣ The company has been through five lines of business and three auditors since its core business was banned in 2015. Crypto mining is the latest promote. ‣ BTCM is known in China for running low-level scams and Ponzis. Unfortunately, a lot of U.S. investors have not yet caught on to the grift.

CDXC Unhealthy A Full Dose of Promotion

After months of examining ChromaDex (CDXC), we have come to the conclusion that the company is pure hype, dished up by an Oceans 11 of stock promoters. CDXC promotes its single product, a health supplement, with iterative press releases that boost share price long enough for insider sales before the vaunted advantages contained in those press releases quietly disappear.

MARA Marathon: Mining Investor Credulity

Mining is the last frontier of crypto fraud. We’ve had major frauds committed by the exchanges, the crypto banks, liquidity pools, and more. There was the mining fraud Ebang (EBON) that Hindenburg exposed, and now we have a company with all of 25 people that claims to have bought 240,000 miners but somehow has deployed less than one-third of them.

YMM Full Truck Alliance (YMM) A Round Trip for Investors?

Our report has five sections that we believe are powerful on their own. Together, we feel they are overwhelming, and the company looks significantly over-valued. 1. Interviews allege round tripping 2. Accounting and other disclosures effectively corroborate that the numbers are too high, which might be suggestive of round tripping. 3. Questionable acquisitions: on the balance sheet side, acquisitions have been made and written off shortly afterwards. 4. Fundamental business deterioration: We think the VAT rebate will end. There are also a lot of insider sales and weakening cash flows 5. Other major risks include the undercapitalized loan business, regulatory problems, and weak internal controls