Another Busy Week!

Thanks for joining us for the second edition of the Activ8Finance weekly Short Report. This week brought a spotlight to real estate, with short sellers zeroing in on two homebuilders and a REIT—all raising questions about leverage, demand assumptions, and aggressive accounting. We also dropped updates on AppLovin and another lithium name, keeping the pressure on tech-adjacent hype. Whether you're tracking housing sentiment or battery metal booms, it was a loaded week.

Real Estate
Hunterbrook Media on D.R. Horton (NYSE: DHI)

Report Date: Wednesday 06/26/2025

• Close Price Day Before Report: $127.29

• Low on Report Date: $125.04

• Close Price Day of Report: $127.15

• Close Price End of Week: $128.69
  

   Quick Summary: Hunterbrook Media’s latest exposé on D.R. Horton reveals troubling patterns beneath the company’s rapid expansion and affordability pitch. While it remains the nation’s largest homebuilder by volume, internal documents and firsthand accounts suggest that speed and savings may be coming at the cost of safety, quality, and accountability.

  
  Key red flags:

  • Defective & Unsafe Builds: Homeowners across 16 states reported persistent mold, foundational cracks, electrical hazards, and faulty HVAC systems—conditions that rendered some homes unlivable just months after closing.

  • Cost-Cutting Culture: Internal communications highlight a drive to swap out premium materials for cheaper alternatives. What’s marketed as “efficiency” may in fact be systemic underbuilding.

  • Warranty Runaround: Buyers describe a warranty process that is opaque and obstructive. Common claims—like water damage or structural flaws—are often denied, delayed, or ignored entirely.

  • Mismatch Between Marketing & Reality: Promotional promises of quality and craftsmanship clash with evidence of shoddy workmanship, cheap finishes, and poorly executed installations.

  • Investor Implications: Despite strong headline sales, Activ8 warns these systemic issues could trigger regulatory scrutiny, litigation risk, and long-term brand erosion.

  
  Impact:
  Despite the intensity of Hunterbrook’s allegations against D.R. Horton—ranging from shoddy construction practices to deceptive warranty tactics—the market reaction was notably muted. The stock closed at $127.29 the day before the report, dipped just 1.8% to an intraday low of $125.04, and rebounded to end the week at $128.69, up 1.1% from pre-report levels. While investors may be discounting near-term risk, the report could still lay the groundwork for longer-term reputational and regulatory headwinds.
  
  Read Activ8 Finance’s Analysis

Real Estate
Hunterbrook Media on Lennar (NYSE: LEN)

Report Date: Monday 06/26/2025

• Close Price Day Before Report: $109.77

• Low on Report Date: $107.87

• Close Price Day of Report: $109.81

• Close Price End of Week: $110.21
  
  Thesis: Hunterbrook Media’s latest exposé also highlighted, Lennar, one of America’s largest homebuilders, markets itself on innovation and value—but Hunterbrook’s investigation uncovers a disturbing disconnect. Through interviews, photos, and public records, the report paints a picture of widespread construction shortcuts, evasive customer service, and a warranty process that leaves homeowners stranded.

  
  Key red flags: (some additional points)

  • Widespread Home Defects: Reports include severe mold, condemned properties, structural cracks, flooding, and exposed wiring—raising major safety and habitability concerns.

  • “Value-Engineering” Gone Wrong: While Lennar’s leadership frames material substitutions as strategic, findings suggest this approach has led to substandard construction across numerous developments.

  • Warranty Evasion: Buyers describe months-long delays, denials of coverage for serious issues, and an uphill battle for even basic repairs. Some were forced to litigate or pay out-of-pocket just to make their homes livable.

  • False Advertising Allegations: Marketing materials promised high-quality finishes and reliable construction—but the reality was often cheap fixtures, rushed builds, and persistent flaws.

  • Market Risk: As lawsuits and public complaints mount, Activ8 flags potential for reputational damage, consumer backlash, and future regulatory pressure.

  
  Impact:
  Lennar’s stock showed similar resilience in the face of Hunterbrook’s report, which accused the homebuilder of cutting corners and masking serious construction defects. Shares slipped 1.7% to a low of $107.87 on the day of publication, down from a prior close of $109.77. But by week’s end, Lennar had not only recovered but inched up 0.4% to close at $110.21. The muted price action suggests investors are either skeptical of the allegations or awaiting further developments before reassessing the risk.
  
  Read Activ8 Finance’s Analysis

Lithium, Batteries
Grizzly Research on Microvast Holdings (NASDAQ: MVST)

Report Date: Monday 06/25/2025

• Close Price Day Before Report: $3.91

• Low on Report Date: $3.51

• Close Price Day of Report: $3.90

• Close Price End of Week: $4.04
  
  Quick Summary: Grizzly Research alleges that Microvast, a U.S.-listed EV battery maker, is fundamentally misrepresenting its business to investors. The report paints a picture of a China-based company propped up by failed projections, undisclosed insider ties, and questionable financial maneuvers—raising serious concerns about its credibility and future viability.

  
  Key red flags:

  • China-Centric, U.S.-Disguised: Despite its U.S. listing and branding, Grizzly asserts that Microvast is “effectively a Chinese company” with most operations, revenue, and leadership based in China—exposing it to geopolitical and regulatory risks.

  • Unfulfilled Government Deals: Multiple touted U.S. partnerships, including a high-profile DOE grant, were withdrawn or failed to materialize. The company continues to promote deals that Grizzly claims are either defunct or overstated.

  • Undisclosed Insider Ownership: The report alleges that the CEO’s family owns key suppliers through shell entities—introducing potential conflicts of interest and self-dealing that have not been disclosed to investors.

  • Recurring Losses & Weak Demand: With declining revenue and significant net losses, Grizzly questions Microvast’s ability to execute—suggesting demand for its batteries is weaker than claimed.

  • Red Flags in Corporate Governance: A revolving door of auditors, an opaque shareholder structure, and recurring missed milestones point to deeper structural issues that investors may be underestimating.

  • Not the First Warning Shot: J Capital Research also published a report on Microvast in November 2023, signaling that skepticism around the company has been building for some time.

    
    Impact:
    Grizzly Research’s report on Microvast Holdings (MVST)—alleging undisclosed insider ties, questionable China-linked operations, and overstated financial health—failed to shake investor confidence in the short term. The stock dipped 10.2% intraday on the report date, falling from a previous close of $3.91 to a low of $3.51. Yet by the end of the week, MVST had rebounded sharply, closing at $4.04—up 3.3% from pre-report levels. The bounce suggests traders may be treating the allegations as noise for now, though regulatory or legal developments could still shift sentiment.
    
    Read Activ8 Finance’s Analysis

Real Estate
Wolfpack Research on CTO Realty Growth, Inc. (NYSE: CTO)

Report Date: Monday 06/25/2025

• Close Price Day Before Report: $18.08

• Low on Report Date: $17.09

• Close Price Day of Report: $17.10

• Close Price End of Week: $17.31
  
  Quick Summary Wolfpack Research is short CTO Realty Growth, accusing the shopping-center REIT of accounting deception, shareholder dilution, and self-serving management practices. Despite boasting a high dividend, the firm allegedly relies on non-GAAP gimmicks and financial sleight of hand to hide operational instability.

  
  Key red flags:

  • Misleading Metrics: CTO excludes recurring capex from AFFO—unlike all peer REITs—creating the illusion of sufficient cash flow to support its dividend. The adjusted 2024 AFFO would imply a $10M shortfall and 134.8% payout ratio.

  • Dilution-Driven Dividends: With operating cash flows too low to cover payouts, CTO has increased its share count by 70% since 2022—effectively funding dividends via shareholder dilution.

  • Sham Loan Cover-Up: CTO allegedly used a $1.5M “loan” to disguise rent non-payment by a top tenant at Ashford Lane, only to reclassify it later as a capital improvement—avoiding impairment.

  • Compensation Conflicts: 70% of executive bonuses are tied to the inflated AFFO figure. By industry-standard accounting, CTO management wouldn’t have earned bonuses since 2021—potentially avoiding $8M in payouts.

  • Portfolio Red Flags: Tenant bankruptcies, shadow vacancies, falling rents, and high turnover plague multiple properties. Analysts warn the firm faces hard decisions: cut the dividend, slash capex, sell assets—or dilute further.

  
  Impact:
  Wolfpack Research’s takedown of CTO Realty Growth—accusing the REIT of deceptive accounting, sham loans, and unsustainable dividends—triggered a modest selloff. Shares dropped 5.5% intraday on the report date, falling from a prior close of $18.08 to a low of $17.09. The stock recovered slightly to close the week at $17.31, still down 4.3% from pre-report levels. While not a collapse, the decline signals that investors may be taking the allegations more seriously—especially given the REIT’s already stretched financial profile.
  
  Read Activ8 Finance’s Analysis

This Week in the News

This week we updated our coverage on AppLovin with a new up-to-date expose on the reports released.

The AppLovin Exposé: How Three Research Firms Uncovered a $173B Tech Giant’s Alleged Fraud Empire

AppLovin’s AI-powered adtech fairy tale may be unraveling into one of the most explosive corporate fraud sagas in recent memory. Between February and May 2025, Culper Research, Fuzzy Panda Research, and Muddy Waters Research launched coordinated attacks on the company—alleging everything from backdoor installs and child tracking to systematic platform policy violations and executive deception.

What was once 2024’s market darling is now a digital house of cards.

This week, we’ve consolidated all major short reports into one comprehensive dossier—highlighting how AppLovin’s AXON 2.0 “AI revolution” may instead be a smokescreen for policy-busting ad tactics, stolen data, and privacy breaches at global scale.

If AppLovin’s revenue hinges on black-box behavior that violates Apple, Google, and Meta’s rules, the entire business model could vanish—overnight.

Read the full article at Activ8Finance.com

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