This week delivered a brutal reality check for activist short selling targets, with mixed results across four major reports. While Pure Storage and SuperX AI largely shrugged off devastating critiques from Kerrisdale Capital and J Capital Research respectively, NovaBay Pharmaceuticals validated BMF Reports' forensic takedown with significant volatility, and NextNav showed modest weakness following Night Market Research's regulatory concerns. The week highlighted the market's selective response to short seller arguments, with some targets demonstrating surprising resilience despite compelling bear cases.

BMF Reports Report on NovaBay Pharmaceuticals, Inc. NYSE:NBY

Report Impact on Stock Price

BMF Reports' forensic takedown of NovaBay as David Lazar's latest shell company triggered immediate volatility, with the stock plunging 7.8% intraday to $2.68 before recovering. The report's detailed expose of Lazar's control structure and empty shell status drove significant trading volume, though the stock managed to close up 37% at $3.67 as retail traders appeared to dismiss the short seller's warnings.

Who is NovaBay Pharmaceuticals?

NovaBay Pharmaceuticals is a defunct United States-based pharmaceutical company that previously developed eye care products, primarily the Avenova brand. However, the company sold its only revenue-generating asset (Avenova) in June 2024 for $15.6 million to Legacy Ventures Pharma and now operates as an empty shell with no commercial operations, no revenue, no pipeline, and no business plan.

Key Points from the Report

• Empty Shell Company - NovaBay openly admits in its 10-Q that "We do not expect to generate significant revenue... our future operations are dependent on identifying a strategic transaction or merger," having sold its only asset and ceased all commercial operations

• David Lazar's 95% Control Acquisition - Serial microcap manipulator David Lazar gained 95% voting control through 1.3 million Series B preferred shares for just $20,000 - a 97% discount to market price - via his Custodian Ventures LLC vehicle

• Dividend Smokescreen Operation - The company issued a $0.80 special dividend totaling $8.2 million (over 50% of Avenova sale proceeds) that primarily benefited insiders and Poplar Capital before Lazar's takeover, with suspicious timing suggesting coordination

• Extensive Legal and Ethical Baggage - Lazar faces a Goldman Sachs debt lawsuit, CPA Ontario professional misconduct ruling with $6,500 in fines, and connections to disbarred attorney David Kagel who stole $25,000 in client funds from a Lazar deal

• Proven Track Record of Equity Destruction - Lazar's shell game history includes ENZC (down >95%), ILAL (collapsed), LQR House (down >80%), and CYCC where he dumped 195 million shares for $5.5 million, with every Lazar-controlled entity collapsing 80-99% post-transaction

  Read our full summary here

Kerrisdale Capital Report on Pure Storage, Inc. NYSE:PSTG

Report Impact on Stock Price

Kerrisdale Capital's comprehensive analysis of Pure Storage as a "flash in the pan" with 55% downside had minimal market impact, with shares declining just 4.3% to $74.50 intraday before recovering strongly. The stock closed up 1.7% at $79.21, suggesting investors dismissed Kerrisdale's TCO analysis and AI infrastructure concerns despite the detailed technical critique.

Who is Pure Storage?

Pure Storage is a United States-based enterprise storage technology company headquartered in Santa Clara, California, that specializes in all-flash storage arrays and data management solutions. Led by Chairman & CEO Charles Giancarlo since 2017, the company trades on the NYSE under ticker $PSTG with a market cap of $27.5 billion as of September 2025.

Key Points from the Report

• "Melting Ice Cube" Business Model - Pure Storage faces declining competitive differentiation as the all-flash array adoption wave that drove its growth has matured, with revenue growth slowing from historical 25%+ levels to just 12% in FY2025

• Flawed Total Cost of Ownership Claims - Kerrisdale's analysis demonstrates that HDDs maintain a 5-6x TCO advantage over Pure's flash solutions at hyperscale, with 30TB HDDs costing $30.3M versus $178.6M for Pure's 150TB DFMs in data center deployments

• Poor AI Infrastructure Positioning - Despite AI hype, Pure faces intense competition from specialized players like VAST Data, WEKA, and DDN who achieve superior AI performance at scale, while hyperscalers like Meta license Pure's software but refuse to buy their hardware

• Margin Compression Risk - The company's new Pure//E products targeting HDD displacement will have "low-to-mid 40s" gross margins, threatening the 70%+ margins that justify Pure's SaaS-like 6.3x EV/Revenue valuation multiple

• Accounting and Execution Concerns - Warning signs include declining RPO growth over six quarters, stock-based compensation representing 56% of cash flow, recent CFO departure, and CEO Charles Giancarlo's "grossly exaggerated claims" about flash displacing HDDs by 2028

  Read our full summary here

J Capital Research Report on SuperX AI Technology Limited NASDAQ:SUPX

Report Impact on Stock Price

J Capital Research's devastating expose of SuperX as a "fake AI company" controlled by a convicted child molester initially drove shares down 5.6% to $46.10, but the stock surged 39% intraday to $68.00 before settling at $49.51. The dramatic volatility suggests retail traders may have interpreted the short attack as a buying opportunity despite the serious allegations.

Who is SuperX AI Technology Limited

SuperX AI Technology Limited is a failing Hong Kong-based interior design company that has rebranded itself as an AI technology firm. Formerly known as Junee Limited, the company operates from an 11th floor office building and has seen its core interior design and fit-out business collapse by 67% over two years, with revenue falling from $9.6 million in 2022 to just $2.9 million in 2024.

Key Points from the Report

• Fake AI Business Model - SUPX claims to be an AI technology company but has zero evidence of actual AI products, with research revealing photoshopped product images, copied specifications from other companies' websites, and no legitimate AI partnerships or expertise

• Criminal Leadership and Control - The company is 10.2% owned by convicted child molester Wang Zhenhua (former Communist Party official serving a 5-year prison sentence) through Set Hero Developments, while 40% is controlled by Alpha Generator Limited, a BVI-registered entity connected to Chinese property developers

• Extreme Management Dysfunction - CEO Howard Tang was fired in July 2025 (had securities license suspended for 17 months), the company has cycled through 3 auditors in one year, and multiple board members have resigned amid the chaos

• Absurd Valuation Disconnect - Trading at 472x annual revenue with a $1.37 billion market cap despite generating only $2.9 million in declining interior design revenue, representing one of the most extreme valuation mismatches in public markets

• Pump-and-Dump Scheme Structure - J Capital Research identifies this as a scheme by Chinese property developers to exit declining real estate investments, with only 86 social media followers despite +1,284% year-to-date stock performance indicating artificial price manipulation

  Read our full summary here

Night Market Research Report on NextNav Inc. NASDAQ: NN

Report Impact on Stock Price

Night Market Research's analysis of NextNav's "desperate FCC petition" had a modest but sustained impact, with shares declining 7.3% intraday to $15.14 and closing down 1.7% at $16.05. The relatively muted response suggests investors are waiting for FCC developments rather than fully pricing in the regulatory risks outlined in the report.

Who is NextNav Inc.?

NextNav Inc. is a failing navigation company founded as CommLabs in 2007 and headquartered in Virginia. The company operates positioning technology using the 900 MHz band and went public through a de-SPAC transaction in 2021, trading on NASDAQ under ticker $NN.

Key Points from the Report

• Desperate FCC Petition Strategy - NextNav is seeking a $4 billion spectrum windfall through an FCC petition to avoid bankruptcy, with the company facing overwhelming opposition from major incumbents including Boeing, Apple, Texas Instruments, and the Chamber of Commerce

• Catastrophic Financial Performance - The company has generated only $6 million in revenue while accumulating $920 million in losses since 2007, with $100 million in annual losses and $190 million in debt creating an unsustainable financial position

• Massive Industry Opposition - Nearly 2,000 FCC comments oppose the petition (99.5% opposition rate), with concerns about interference to 294 million Part 15 devices and $23 billion in potential toll revenue at risk

• Spectrum License Crisis - 65% of NextNav's spectrum holdings (148 of 226 licenses) require construction deadline waivers, with the company valuing licenses at $0.002/MHz-POP versus $0.70 market rates - a 300x valuation gap

• Regulatory and Political Headwinds - Trump administration precedent strongly favors public auctions over private spectrum grants, with the One Big Beautiful Bill Act mandating auctions and DOGE priorities focused on deficit reduction rather than corporate windfalls

  Read our full summary here

In a first for activist research, Deep Specter Research is applying nation-state-level cybersecurity techniques to uncover corporate fraud that traditional analysis misses. Founded by offensive security specialists and multinational executives, the firm uses advanced cyber intelligence methods to expose structural weaknesses, compliance failures, and digital blind spots in public companies, bringing technical scrutiny to the activist research space where cyber risk and corporate governance increasingly converge.

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