This Year, Short Sellers Are Targeting These Soaring Stocks.
The last time this kind of short-selling activity occurred was with $AppLovin Corporation(APP)$ , but AppLovin managed to withstand multiple short reports and delivered an impressive earnings report this season.
The short report raises concerns about $Tempus AI(TEM)$ AI’s leadership, pointing out that CEO Eric Lefkofsky has been linked to companies that experienced financial scandals, including bankruptcies and restatements. The report also questions the company’s partnerships and joint ventures, suggesting potential round-tripping and related-party transactions.
The report further scrutinizes Tempus AI’s billing practices, highlighting the company’s aggressive use of billing code 81479, which is known for minimal regulatory oversight and a high risk of misuse. This strategy could potentially inflate revenues at the expense of patient care, with the report suggesting that Tempus AI and its acquired entity Ambry may be prioritizing revenue over clinical necessity.
In summary, Spruce Point warns investors about the company’s reliance on perceived equity value, aggressive accounting practices, and unsustainable strategies. They predict that Tempus AI’s stock could face a 50%-60% downside risk.
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