I think I'm right on SOS Limited (SOS) , and both Hindenburg and Culpers rushed out short-thesis research provided to them by outside parties. How do I know the research was provided by outside parties? Those same parties reached out to me privately, looking for me to support the bearish thesis. When the stock didn't immediately go to zero, they reached out again seeking guidance on what they may have missed or what I thought.
I presented my thesis, in detail, here.
Was I perfect? No.
But I was much closer than either of the short reports.
SOS has finally responded today. The FXK non-binding letter of intent is no more. The company opted to use the non-binding part and walk away. It's important to pay attention to that "non-binding" part if you're a short. It's kind of important.
I still believe the companies were introduced as I theorized. Where I think SOS went wrong was rushing into a possible deal, trying to jump on a hot market without doing enough due diligence before signing the non-binding LOI. That's a consideration for long-term investors, but also a big loss for the shorts in their argument.
HY International turned out to be a shell. The bears were correct in that conclusion, but they didn't follow through. This is because they lack experience in the actual crypto-mining space. Rig sellers, especially in the secondary market, aren't looking for a web presence or a ton of notoriety.
When you combine this miss with that of the headquarters miss, I'm not sure how the short reports continue to have any influence on the stock at all.
I know shorts have gone on to complain about the location of the rigs, despite video evidence from the company, but the fact is they are likely drawn in with confirmation bias. Every piece of video, news, etc., will only confirm their bearish thesis even if it flies in the face of said thesis.
SOS is a Chinese based company, pivoting from its core business to add mining. That being said, they are confirmed to be involved in blockchain projects with Bridge Mutual, whether as a partner or an investor, but it exists. There's a reason bears have avoided touching that part of the subject matter.
In the end, we're tasked with our own due diligence.
Yesterday, a report targeted Skillz (SKLZ) . The main driver revolved around their being nothing related to the NFL deal to be found anywhere. Here's a screenshot.
Five minutes of searching and an individual could have found this on the NFL's own site.
My conclusion: the market is running on high emotions, but while we focus on Gamma squeezes and look what's happening in GameStop (GME) , we're ignoring how short reports are doing the same things to stocks on the downside. Lately, these reports leave a lot to be desired. They appear to be praying on the emotions of traders and the ease at which even a poorly written and researched report can hammer a stock in the short-term.