==Tingo (TIO) : Hindenburg takes short position

•  Report alleges that Nasdaq listed company is an ‘exceptionally obvious scam’
• Tingo had a market capitalisation of more than $400mn before the report was released.
• Tingo’s business rests on claims that it has distributed 9mn branded mobile devices to Nigerian farmers through which they can access cheap credit and microloans — as well as weather forecasts, prices of farm input and produce — on the company’s online marketplace, Nwassa.
• Big Four auditor Deloitte is also in the short seller’s crosshairs after its Israeli arm gave Tingo a clean, unqualified audit, leading Hindenburg to suggest they had “missed or rushed through procedures that would have uncovered important findings”.

Shares in Tingo Group more than halved on Tuesday after short seller Hindenburg Research said it had placed a bet against the Nasdaq-listed fintech group whose chief executive made a bid for Sheffield United football club.

Hindenburg alleged in a report released on Tuesday that the company, which operates a mobile technology and payments business focused on farming and food-processing operations in Nigeria, was an “exceptionally obvious scam”.

The New York-based short seller is run by Nathan Anderson and in January alleged fraud and stock price manipulation at India’s Adani group, triggering a sell-off in the group’s listed entities. Last month it unveiled a position against Icahn Enterprises, the publicly listed fund run by activist Carl Icahn.

On Tuesday, Hindenburg claimed that Tingo had lied about some of its partnerships and products, did not hold the mobile licence it required to operate parts of its business and said it found no evidence that the group owned a food-processing facility nor that it had started to build one.

Bloom Energy (BE) : stock tanks as short seller calls for its demise

• Subject of a cautious, short report from Hindenburg Research. The stock, which has not posted a substantial recovery since dropping in mid-August after issuing cautious 2020 guidance, again sinks to new all-time lows.

 

** 4 months later **

Shares of Bloom Energy Corp. careened toward a record low Tuesday after a short seller said it uncovered billions in liabilities and called the clean-energy company an “obvious bankruptcy candidate.”

Bloom Energy BE, -24.22%  stock fell more than 20% to all-time intraday low of $3.15. It was down 90% from a Sept. 26, 2018 high of $35.80, and 80% lower than its July 2018 initial public offering price of $15.

Short seller Hindenburg Research said it found an estimated $2.2 billion in undisclosed serving liabilities.

“Bloom’s tricky accounting allows it to mask servicing costs and shift write-downs to other periods, thereby avoiding recognizing major recent additional losses,” Hindenburg said in a research note. “We believe that large debt maturities in 2020 and 2021, amounting to nearly $520 million, make Bloom Energy an obvious bankruptcy candidate.”

The company “will become yet another tombstone in the Silicon Valley cemetery of dead unicorns,” Hindenburg said.

“We strongly disagree with the conclusions drawn,” Bloom said in a statement later Tuesday. “In particular, the service replacement liability mentioned in the report is grossly misleading. Bloom Energy will make a further statement on this topic in due course.”

The analysts at Hindenburg did not engage with the company, Bloom added.

Bloom makes solid oxide fuel cells that are used in on-site, stationary power-generation servers. The servers convert natural gas or biogas into electricity through an electrochemical reaction, which results in lower emissions, the company says.

Bloom Energy’s shares fell 43% on Aug. 13 on concerns that clean-energy initiatives in key states, such as bans or halts in new natural-gas connections, could end up hurting the company.

Hindenburg claimed that Bloom’s technology is “not sustainable, clean, green or remotely profitable.”

Bloom priced its initial public offering last year at the top of the range. It slid below the IPO price by late 2018. It closed above the IPO price just four times this year, the last time on May 3. It has traded in the single digits since early August.

The shares are down more than 67% this year, contrasting with gains of 20% for the S&P 500 index SPX, +0.04%

=Aphria (APHA) reported earnings on Fri 11 Jan 2019 (b/o)

Aphria reports Q2 (Nov) results, misses on revs; Co-founder Cole Cacciavillani and CEO Vic Neufeld to transition out of roles over coming months

• Reports Q2 (Nov) earnings of CC$0.22 per share, may not be comparable to the single analyst estimate of (CC$0.04); revenues rose 154.9% year/year to CC$21.67 mln vs the CC$27.48 mln single analyst estimate. The increase in net income relates to gains on the co's long-term investment portfolio, primarily divestitures of positions in Hiku Brands and Liberty Health Sciences.
  • Initial sales in the newly legalized Canadian adult-use market accounted for over 1,900 kilogram equivalents sold. Medical cannabis sales declined marginally from 1,466.2 kilogram equivalents sold in the previous period to 1,443.6 kilogram equivalents sold in the second quarter. Cannabis oil sales, as a percentage of volume, decreased to 19% of overall sales from 39% in the prior quarter, reflecting the higher percent of dry bud sold in the adult-use market.
• Aphria Chief Executive Officer Vic Neufeld, and Co-founder Cole Cacciavillani, are both nearing the end of their five-year journey with the Company and will transition out of their executive roles over the coming months but remain on the Board. Working closely with Irwin D. Simon, Aphria's recently appointed independent Chair, and President Jakob Ripshtein, Mr. Neufeld and Mr. Cacciavillani intend to complete a smooth and responsible transition to a globally-minded executive leadership team for the long-term benefit of the Company's patients, shareholders, customers, and employees. The Board has requested that, following the transition, Mr. Neufeld and Mr. Cacciavillani continue to apply their knowledge and expertise as special advisors to both the Chair and the President, ensuring a smooth transition of institutional experience and strategic advice until a new CEO is appointed.
• "This is the first quarter to partially include adult-use sales, helping to drive 63% quarter-over-quarter net revenue growth, as did continued strength in sales to the medical-use market. As expected, gross margins declined, reflecting lower effective selling prices in the adult-use market, as well as temporarily lower yields and higher production costs in the quarter as we moved aggressively to build out production facilities and implement new automation processes...A top priority for Aphria is expanding production and automation to secure our long-term cost and scale advantages. The Part IV and V expansions of Aphria One are now complete and awaiting Health Canada approval, while an application for a cultivation licence at Aphria Diamond has been submitted and is awaiting pre-cultivation inspection. Based on this, we now expect to generate first sales from these new facilities later in the calendar year, pending Health Canada approvals, with our annualized harvest reaching 255,000 kilograms, compared to 35,000 kilograms currently, by the end of calendar 2019."

====

The leadership transition comes after short sellers Hindenburg Research and Quintessential Capital Management sparked a plunge in Aphria’s shares last month after alleging the company bought assets at inflated prices from insiders. Since their report was released on Dec. 3, the company’s stock has fallen 17 percent.

“We continue to have the greatest pride in what Aphria has achieved, and its future has never looked brighter,” Neufeld said in a statement Friday.

Cacciavillani is Aphria’s second-largest shareholder with about a 2.9 percent stake while Neufeld has about a 0.8 percent holding, according to data compiled by Bloomberg.