This Week in Activist Short Selling

This week was anything but quiet in the short activism world. Three high-impact reports targeted companies across crypto, Indian industrials, and autonomous tech, each exposing what researchers allege are deep structural flaws and insider-friendly schemes. From BitMine’s ETH illusion unraveling in spectacular fashion, to Vedanta’s debt-fueled dividend treadmill, to fresh doubts about PONY.ai’s self-driving claims, short sellers are putting high-profile narratives under the microscope. Volatility followed in some cases, while others may be slow-burning time bombs.

Fugazi Research Report on NASDAQ: BMNR
Report Date: Wednesday, July 9th, 2025

Market Impact

BitMine collapsed from $111.50 pre-report to $40.62 by week’s end, a staggering 64% drawdown. The stock tanked over 40% on report day alone, signaling extreme investor alarm and liquidation.

Who is BitMine Immersion Technologies?

Initially a Bitcoin miner, BitMine repositioned itself as an Ethereum treasury vehicle following a $250 million PIPE deal and a move to the NYSE American. Despite this pivot, it holds no ETH, lacks infrastructure, and appears structured primarily to enrich insiders.

Key Points from the Report

• Zero ETH Exposure: Company announced a $250M ETH buy but had not purchased any as of July.

• Share Scarcity Strategy: Just 3.2M float vs. 62.3M outstanding led to a massive, artificial price surge.

• Insider-Friendly Structure: CEO arranged PIPE terms to benefit entities he controls, with guaranteed returns.

• Fake Facilities: No proper headquarters; key assets sold to the CEO’s LLC.

• Hype via Tom Lee: Appointment of CNBC’s Tom Lee preceded retail buying frenzy—no real governance boost.

Viceroy Research Report on NSE:VEDL.NS
Report Date: Wednesday, July 9th, 2025

Market Impact

Vedanta’s stock dipped from ₹456.30 to ₹442.75 for the week, after hitting an intraday low of ₹420.65. The mild rebound may reflect investor desensitization to debt concerns—or underestimation of the systemic risks flagged.

Who is Vedanta Limited?

Vedanta is a major Indian industrial conglomerate listed on the NSE, with holdings in metals, energy, and mining. Its parent, Vedanta Resources, is accused of bleeding it dry to service its own $4.9 billion in debt—via excessive dividends, suspect loans, and questionable governance.

Key Points from the Report

• Debt-Driven Dividend Drain: VEDL forced to fund payouts with debt despite negative free cash flow.

• Hidden Leverage: Interest costs imply far higher borrowing rates than disclosed.

• Cash Transfers to Parent: $956M loan for a failed buyout and $338M in dubious brand fees extracted.

• Subsidiary Red Flags: Gold laundering, hidden liabilities, and environmental fine cover-ups.

• Audit and Regulatory Risks: Aggressive accounting, questionable auditors, and 100+ liability disclosures.

Grizzly Research Report on NASDAQ: PONY
Report Date: Thursday, July 10th, 2025

Market Impact

PONY.ai’s stock remained steady, moving from $12.14 to $12.77 over the week. Despite Grizzly’s claims, the muted reaction suggests markets may be discounting regulatory and credibility risks—for now.

Who is PONY.ai?

PONY.ai is a high-profile Chinese autonomous driving startup with major backers and operations in both China and the U.S. Once valued at over $8 billion, the company claims to operate fully driverless services but is now under fire for allegedly inflating its tech achievements.

Key Points from the Report

• Misleading Autonomy Claims: 95% of robotaxis in China still have human drivers.

• Regulatory Misrepresentation: Lost key U.S. license in 2022; inflated local Chinese permits to investors.

• Safety Obfuscation: Edited ride videos to hide human interventions.

• Tech Stagnation: Internally reported lack of R&D progress contradicts public messaging.

• Investor Misguidance: Overstates achievements to maintain valuation and market interest.

• XP Inc. Takes Legal Aim at Grizzly Research: Brazilian brokerage XP has filed a defamation suit in New York against short-seller Grizzly Research, alleging the firm published a misleading report to tank its share price. Read our Summary on Grizzly Research’s report on XP that drove this lawsuit.

• Crackdown on Short Selling in South Korea: In response to rising concerns over market manipulation, South Korea is tightening regulations on short selling—introducing stricter disclosure rules and tougher penalties that could curb aggressive strategies by activist short sellers.

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