It was a decidedly bearish week in activist short selling—literally—with both Grizzly Research and The Bear Cave publishing significant reports targeting companies with vastly different market profiles but similar underlying concerns about credibility and operational execution. Grizzly Research took aim at high-flying eVTOL manufacturer Archer Aviation, alleging fundamental design flaws and manufacturing misrepresentations, while The Bear Cave exposed suspected manipulation schemes surrounding micro-cap QMMM Holdings. Both reports highlight persistent themes in activist short selling: the gap between public projections and operational reality, and the vulnerability of retail investors to coordinated promotional campaigns.

Grizzly Research Report on Archer Aviation (NYSE:ACHR)

Report Impact on Stock Price

Grizzly Research report triggered an immediate but measured market response, with ACHR falling from its pre-report close of $9.27 to an intraday low of $9.06 before recovering to close at $9.15 on the day of release. The stock continued declining through the week, ending at $8.95, representing a 3.5% total decline despite the severity of the allegations.

Who is Archer Aviation?

Archer Aviation is a publicly traded electric vertical takeoff and landing (eVTOL) aircraft manufacturer focused on developing urban air mobility solutions. The company's flagship product is the Midnight aircraft, designed as an electric air taxi capable of carrying passengers in urban environments, and has formed partnerships with major airlines and automotive manufacturers including Stellantis. Archer has positioned itself as a leader in the emerging eVTOL market, competing directly with companies like Joby Aviation.

Key Points from the Report

• Certification Delays and Design Flaws: Originally promised "6+ conforming aircraft" for early 2024 but scaled back to non-conforming prototypes, with certification stalled at 15% completion versus competitor Joby's 70% rate

• Idle Manufacturing Facility: Multiple site visits to Georgia facility revealed minimal activity with empty hangars and unused docking ports, contradicting claims of scaling to 50 aircraft annually

• Questionable $6 Billion Order Book: Major orders from Air Chateau ($500M) and Future Flight Global ($580M) appear implausible given customers' lack of operational capacity and track record

• Technical Performance Issues: Midnight aircraft weighs 281% more than competitor Joby's model, with inferior range (100 vs 150+ miles), speed (150 vs 200 mph), and noise levels comparable to helicopters

• Forced Design Changes: Critical rear propeller redesign from 2-bladed to 4-bladed configuration invalidated previous test data and requires extensive regression testing

  Read our full summary here

The Bear Cave Report on QMMM Holdings (NASDAQ:QMMM)

Report Impact on Stock Price

QMMM experienced extreme volatility following The Bear Cave's exposure of suspected manipulation schemes, plunging from $5.17 to an intraday low of $3.80 before recovering to close at $5.09 on release day. The stock rebounded through the week to end at $5.30, demonstrating the persistent influence of the alleged promotional campaigns despite the negative coverage.

Who is QMMM Holdings?

QMMM Holdings is a Cayman Islands holding company operating a digital media advertising service and virtual avatar technology company in Hong Kong through just 28 employees. The company has reported four consecutive years of declining revenue, falling from $3.56 million in 2021 to $2.70 million in 2024, while posting a $1.58 million net loss with auditor-expressed "substantial doubt" about its ability to continue as a going concern.

Key Points from the Report

• Coordinated WhatsApp Manipulation: The Bear Cave's crowdsourced database documented multiple WhatsApp submissions promoting QMMM starting in early August, with the stock rising over 25 times its offering price in two months

• Previous Crash History: QMMM experienced a similar suspicious price cycle with a 95% decline in November 2024, suggesting a pattern of pump-and-dump activity

• Investment Bank Red Flags: Associated with investment banks that have handled other stocks subsequently crashing 80-95% within weeks of promotion

• Fundamental Disconnect: $296 million market capitalization vastly exceeds the company's $2.7 million revenue base and declining financial performance

• Going Concern Warnings: Auditor has expressed substantial doubt about the company's ability to continue operations, yet promotional campaigns continue targeting retail investors

  Read our full summary here

The Bear Cave continues its relentless pursuit to stop Chinese stock frauds infiltrating U.S. markets, providing essential investigative work for investors navigating these sophisticated schemes. If you have WhatsApp images or other evidence of Chinese stock frauds, visit StopNasdaqChinaFraud.com to post and share crucial information that could protect other investors.

Our article on "China Hustle 2.0" reveals how scammers evolved the same fraudulent playbook from the 2018 documentary, swapping reverse mergers for social media campaigns while using identical tactics to target American investors. Despite clear warnings, billions continue flowing into schemes proving investors learned nothing from the documentary's revelations.

• A U.S. appeals court ordered the SEC to reassess the economic impact of Biden-era short-selling transparency rules in a partial victory for hedge fund associations, though the court rejected arguments that the rules would expose confidential positions or exceeded SEC authority.

• China Evergrande, delisted from the Hong Kong Stock Exchange on Monday, leaves behind a massive debt pile and countless desperate creditors.

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