The titles of these short reports just keep getting more absurd. Hindenburg Research is one of the most well-known activist short-seller firms, perhaps best known for exposing Nikola in 2020. Here’s a few of the other short-seller report they’ve released in the past twelve months
- Singularity Future Technology: This Nasdaq-Listed Company’s CEO Is A Fugitive, On The Run For Allegedly Operating A Massive Ponzi Scheme
- Tecnoglass: Cocaine Cartel Connections, Undisclosed Family Deals, And Accounting Irregularities All In One Nasdaq SPAC
- PureCycle: The Latest Zero-Revenue ESG SPAC Charade, Sponsored By The Worst Of Wall Street
I guess that being an activist short-seller requires people to read your short reports. So a bit of click bait in the headline probably helps.
This report focuses on Enochian Biosciences (NASDAQ: ENOB). The $200 million pharmaceutical company has fallen almost 40% since Hindenburg said it was short the company and the co-founder and largest shareholder, Serhat Gumrukcu, was arrested in an alleged murder-for-hire plot.
If this alleged murder plot wasn’t enough, Hindenburg also write that the Gumrukcu is currently facing criminal charges in his native Turkey for falsely posing as a doctor in 2012 and that he was arrested in California in 2017 for a variety of white-collar crimes.
The Hindenburg researchers appear to have gone deep here. They suggest that Gumrukcu made up his educational credentials and bought them on the Russian black market, a process that they then repeat. They also uncovered his past in Turkey as a local magician. There’s probably a fair question – what does his past as a magician add to the short thesis? – but it’s an interesting bit of colour.
The final dot point of Hindenburg’s summary sum up their view of this fascinating story:
- With its founder and main source of scientific discoveries jailed on murder-for-hire allegations, this cash-burning company without peer-reviewed research and no genuine clinical prospects is now a “catch me if you can” story that we believe has finally reached the end-phase.
When reading the report, remember that this company is publicly listed. Meeting all of its quarterly reporting obligations. These are the case studies that remind us why short sellers play such an important role in markets, picking up serious problems that exchanges and government regulators miss.
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