Two Reports, Two Outcomes: India's Travel Giant & A Melting Ice Cube
Weekly Wrap Up: Sunday, April 5, 2026
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Check Out DashboardWelcome to the first Activ8Insights newsletter since the launch of our new dashboard product. Every week, we summarize activist short selling reports that moved markets, break down the key allegations, and track how stocks responded.
It was a full week. Morpheus Research made its India debut with a sweeping 103-interview investigation into MakeMyTrip, alleging the travel giant has been defying antitrust regulators while inflating profits. Shares fell 10% intraday before recovering to close the week up nearly 10%. GlassHouse Research went after Aviat Networks, calling it a "melting ice cube" and alleging manufactured earnings through working capital manipulation. Aviat closed the week down over 10%. Carson Block of Muddy Waters was active in the media on AI risk and credit markets, Canada's CIRO proposed short-selling reforms, and we published a new editorial on activist short sellers and federal whistleblower programs.
Quick Hits on Reports Published This Week
- Morpheus Research targeted MakeMyTrip (MMYT), alleging India's dominant OTA continues to defy its 2022 antitrust order while inflating profits through accounting tricks. Stock closed the week up 9.75%.
- GlassHouse Research targeted Aviat Networks (AVNW), alleging the wireless networking company recognizes revenue before billing customers to manufacture the appearance of growth. Stock closed the week down 10.66%.
New from Activ8 This Week
A deep dive into one of the least examined dynamics in markets: the overlap between activist short sellers and government whistleblower programs. Drawing on academic research and SEC data, this piece explores how short sellers have quietly become the agency's largest source of outside intelligence and what the financial incentives and proposed rule changes mean for the industry.
New Activist Reports
Morpheus Research Short Report on MakeMyTrip
| Metric | Price | Change |
|---|---|---|
| Close (Day Before) | $36.30 | — |
| Low (Report Date) | $32.67 | -10.00% |
| Close (Report Date) | $36.37 | +0.19% |
| Close (End of Week) | $39.84 | +9.75% |
Stock Price Impact
Morpheus published its MakeMyTrip report on March 30. Shares dropped to an intraday low of $32.67, a 10% decline from the prior close of $36.30, before closing the day nearly flat at $36.37, up just 0.19%. The near-flat close was notable given the breadth of the allegations. By end of week, shares had climbed to $39.84, up 9.75% from the pre-report level. The intraday low and the subsequent rally tell two different stories: the opening-hour reaction reflected genuine concern from a 103-interview investigation, while the recovery suggests the market did not expect near-term regulatory or financial consequences to materialize.
About The Company
MakeMyTrip Limited (NASDAQ: MMYT) is India's largest online travel agency with an estimated 50%+ share of the online travel market. Founded in 2000 and headquartered in Gurugram, the company operates brands including MakeMyTrip, Goibibo, and redBus, covering hotels, flights, packages, and rail and bus ticketing. With 87 million lifetime customers and 77,000 corporate clients, it is a dominant player in one of the world's fastest-growing travel markets. Hotel bookings account for roughly 43% of margin. CEO Rajesh Magow leads the company, which trades at a significant premium to global OTA peers. Earlier this year, MakeMyTrip merged RedBus India into its domestic entity, with a potential India listing reported to be under consideration.
Key Points from the Report
- The report alleges MakeMyTrip continues to enforce price parity with hotel partners despite a 2022 CCI order and $26.1 million fine, now using an internal "price competitiveness score" to penalize non-compliant hotels. Managers from Pride Hotels and Suba Hotels, representing roughly 164 properties, confirmed price parity remained active in their agreements with MMYT.
- Morpheus claims an undisclosed CCI "hub-and-spoke" cartel investigation is underway, with the Director General's findings expected in early 2026. A legal expert cited in the report called it "serious for one reason: a hub-and-spoke conspiracy is looked at under the Cartel Offense."
- Financial red flags include a $212 million gap between MMYT's "Adjusted Profits" and IFRS figures since 2021, a $20 million receivable from insolvent Go Air provisioned for only half, and an unprovisioned CCI fine liability potentially exceeding $34 million that could consume roughly 60% of 2025 net income.
- A review of 3,679 budget hotels found nearly 10% with documented safety issues including extortion and threats to women. According to Morpheus, 113 hotels with active women's safety complaints remained listed in major metros despite MMYT launching safety features in January 2026.
Read the Full Report Summary →
GlassHouse Research Short Report on Aviat Networks
| Metric | Price | Change |
|---|---|---|
| Close (Day Before) | $22.61 | — |
| Low (Report Date) | $19.07 | -15.66% |
| Close (Report Date) | $19.67 | -13.00% |
| Close (End of Week) | $20.20 | -10.66% |
Stock Price Impact
GlassHouse published its Aviat Networks report on April 1. Shares fell to an intraday low of $19.07, a 15.66% decline from the prior close of $22.61, and closed the day at $19.67, still down 13.0%. Unlike MakeMyTrip, there was no bounce. Aviat ended the week at $20.20, off 10.66% from pre-report levels. Roth Capital maintained its Buy rating and $38 price target in defense of the company, but the market did not follow. GlassHouse's $8.75 price target implies roughly 60% additional downside, and the sustained decline through week's end suggests the earnings quality allegations gained traction. The context matters: Aviat had beaten analyst estimates in five consecutive quarters before this report landed.
About The Company
Aviat Networks, Inc. (NASDAQ: AVNW) is an Austin, Texas-based provider of wireless transport and access networking solutions. It designs, manufactures, and sells microwave and millimeter-wave backhaul equipment to mobile operators, government agencies, and private network operators globally. Aviat expanded its scale through the acquisition of Pasolink from NEC and counts MTN Group among its major customers in emerging markets. The company guided for fiscal 2026 revenue of $440 to $460 million and has recently moved into adjacent markets with a 5G cellular router and a multi-dwelling unit broadband solution. CEO Pete Smith leads a company that, on reported metrics, had beaten analyst EPS and revenue estimates for five straight quarters before the GlassHouse report arrived.
Key Points from the Report
- GlassHouse alleges Aviat is "not generating the earnings it reports," claiming the company recognizes revenue before billing customers and relies on unbilled receivables and estimate-based bookings to pull sales forward, "creating the illusion of growth and profitability."
- The report describes Aviat's financial profile as "a working capital-driven model" relying on balance sheet expansion rather than genuine growth, pointing to rising unbilled receivables, cost-deferring inventory levels, and delayed supplier payments as the key mechanisms.
- Outside of the Pasolink acquisition, GlassHouse sees core sales declining as microwave backhaul is called "a mature and increasingly displaced technology," with fiber taking over in developed markets and the Pasolink deal masking underlying contraction.
- GlassHouse sets a price target of $8.75, implying roughly 60% downside, and flags revenue concentration with emerging market operators like MTN Group, where "revenue can be recognized well before it is billed or collectible."
Read the Full Report Summary →
Activ8 Newswire
Carson Block bets against credit ETFs as an AI hedge — Muddy Waters CEO Carson Block disclosed short positions in LQD and HYG, arguing investors are underestimating AI's disruption to the labor market and that credit spreads have not priced in that risk. Source: Bloomberg
Carson Block on Bloomberg's Masters in Business Live — Muddy Waters founder Carson Block appeared live at Future Proof Citywide Miami for a wide-ranging conversation on short selling and markets. Source: Bloomberg / YouTube
Canada's CIRO proposes new short-selling conduct rules — The Canadian Investment Regulatory Organization released proposed amendments requiring dealers to have policies in place to detect and address client failures to deliver on short sales, stepping back from mandatory close-out requirements in favor of a principles-based approach. Comments open through July 3. Source: Investment Executive
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