Weekly Wrap-Up: Sunday, 09/14/2025
Activ8 Weekly: Six Reports Hit the Market This Week with Mixed Results and Big/Short News
This week delivered a mixed but telling collection of activist short selling reports, with six major publications producing sharply divergent market reactions that highlighted the nuanced ways investors evaluate short research. While most targets initially declined on publication day, the week's end told a more complex story: Sound Group suffered the most significant damage with a 14.1% decline as Fugazi Research's ADR structure warnings resonated with investors, while Super X AI Technology defied Pelican Way Research's "China Hustle" allegations with a surprising 19.6% surge. The biotech space saw aTyr Pharma gain 10.4% despite BMF Reports' harsh assessment, suggesting investors may be positioning ahead of crucial trial data. Meanwhile, established names like Grindr, Faraday Future, and FTAI Aviation showed resilience with modest gains, indicating that markets are becoming increasingly discriminating about which activist theses merit sustained selling pressure versus temporary volatility.
Pelican Way Research Report on SuperX AI Technology Limited (NASDAQ:SUPX)
Report Impact on Stock Price
SUPX shares defied Pelican Way Research's bearish thesis with a strong 19.6% gain, closing the week at $59.20 compared to the $49.51 baseline. Despite Pelican Way's allegations of a "China Hustle" scheme with fake partnerships and related party transactions, the stock only dipped marginally to $49.69 on publication day before staging a robust recovery that suggested investors either dismissed the claims or saw value at lower levels.
Who is SuperX AI Technology Limited?
Super X AI Technology Limited is a Hong Kong-based company that trades on NASDAQ under the ticker SUPX. The company was formerly known as Junee Limited, an interior design business, before pivoting to become an alleged AI infrastructure provider in 2024. SUPX went public through a small $8 million IPO in April 2024, which is typical of "China Hustle" schemes according to the research.
Key Points from the Report
Classic "China Hustle" Structure - SUPX exhibits all hallmarks of fraudulent Chinese reverse mergers, including undisclosed related party transactions totaling over $12 million with entities like PanaAI ($3M) and Mindenergy ($9M+)
Fake NVIDIA Partnerships - The company falsely claims partnerships with NVIDIA, but these alleged partner companies cannot be found in NVIDIA's official partner directory
Copied Products with Fake Branding - SUPX's products appear to be identical to existing Nationgate servers and Phanteks towers, simply rebranded with SUPX logos rather than genuine proprietary technology
Sanctioned Leadership - Former CEO Ho Wai "Howard" Tang was previously suspended for 17 months by Hong Kong regulators and fined $5.5M for inadequate due diligence at his previous firm Ample Capital
Misrepresented Company Size - Despite claiming to be a 51-200 employee company, LinkedIn shows only 3 actual employees, indicating significant misrepresentation of business scale and operations
Read our full summary here
Ningi Research Report on Grindr Inc. (NYSE: GRND)
Report Impact on Stock Price
Grindr shares showed surprising resilience against NINGI Research's scathing report, posting a modest 2.6% gain to close at $16.08 versus the $15.68 baseline. While NINGI's analysis highlighted undisclosed SEC investigations and engineering exodus concerns, the stock's 6.9% decline to $14.60 on publication day proved temporary as shares recovered most losses, potentially reflecting the market's view that the dating app's franchise value remains intact despite operational challenges.
Who is Grindr Inc.?
Grindr Inc. is a LGBTQ+ dating and social networking platform that trades on the NYSE under the ticker GRND with approximately a $1.8 billion market cap. The company claims 14 million monthly active users globally and operates as the dominant dating app in the gay community. Under CEO George Arison, who joined in October 2022, the company has pursued aggressive monetization strategies while implementing controversial policies including a union-busting return-to-office mandate.
Key Points from the Report
Undisclosed SEC Investigation - Former director revealed an ongoing SEC investigation into inflated Average Paying Users metrics, with a data engineer allegedly fired for flagging "double-counting" issues that artificially boost subscriber numbers
Massive Engineering Exodus - An estimated 80% of the engineering team quit following the union-busting RTO mandate, leaving the platform reliant on disengaged outsourced engineers who former employees say "don't care"
Deteriorating User Experience - Internal tests show user churn from aggressive monetization tactics, with only 25% of users reporting the premium "Boost" feature actually works as advertised
Competitive Threats Growing - App downloads declined 12% since Q2 2024 while competitor Scruff surged 47%, and emerging competitor Sniffies is estimated at 30% of Grindr's size with rapid growth momentum
Insider Dumping and Margin Risk - Insiders sold $236 million in stock over 12 months, with 59% of company shares pledged as loan collateral creating significant margin call risk if stock price declines
Read our full summary here
BMF Reports Report on aTyr Pharma, Inc. (NASDAQ:ATYR)
Report Impact on Stock Price
aTyr shares climbed 10.4% to $6.03 by week's end despite BMF Reports' harsh assessment of the biotech as a "one-drug company" with weak Phase 2 data. Following an initial 5.3% drop to $5.17 on the day BMF published their critique of efzofitimod's prospects, the stock rebounded as investors may have viewed the sell-off as overdone ahead of the crucial EFZO-FIT trial results expected in mid-September.
Who is aTyr Pharma?
aTyr Pharma, Inc. is a NASDAQ-listed biotech company founded around 2005 that has operated for approximately 20 years without bringing a single product to market. The company was originally built around a "platform" approach but has now narrowed down to being essentially a single-drug company focused on efzofitimod for pulmonary sarcoidosis. With a market cap of approximately $500-550M, $114M in cash, and a $20M quarterly burn rate, aTyr is led by CEO Dr. Sanjay Shukla, a former Novartis physician who has been with the company since 2017.
Key Points from the Report
Twenty-Year Track Record of Failures - Despite two decades in operation, aTyr has never successfully brought a product to market, with previous programs like Resolaris being shelved and the ORCA program collapsing with 30% layoffs in 2018
Weak Phase 2 Data Foundation - Efzofitimod's Phase 2 results showed only modest signals with 22% steroid reduction and patient-reported outcomes only at the highest dose, providing insufficient proof of concept for the aggressive Phase 3 bet
Problematic Phase 3 Endpoint Design - The steroid-sparing endpoint is notoriously noisy with placebo patients naturally improving over time, making it difficult to demonstrate clear drug efficacy even if the compound has real activity
Massive Dilution Risk Setup - aTyr filed a $300M shelf registration in August 2025 just before trial results, signaling management expects to dilute shareholders regardless of outcome, with an active ATM facility already used for $30.7M in Q2 2025
Questionable Mechanism of Action - The company lacks published binding affinity data for efzofitimod's claimed NRP2 target, shows no evidence of downstream signaling activation, and failed to reduce granuloma burden even in preclinical mouse models of the disease
Read our full summary here
Fugazi Research Report on Sound Group Inc. (NASDAQ:SOGP)
Report Impact on Stock Price
Sound Group experienced the week's most significant decline, falling 14.1% to $22.79 from the $26.52 baseline as Fugazi Research's damning assessment of the company's ADR structure resonated with investors. The stock plummeted to $17.25 on publication day following Fugazi's allegations of vanishing cash and auditor walkouts, though partial recovery to week's end suggested some buyers emerged despite the firm's warnings about the "textbook China ADR trap."
Who is Sound Group?
Sound Group Inc. is a Cayman Islands-incorporated company that trades on NASDAQ under the ticker SOGP, operating an audio social platform in China focused on virtual gifts for hosts and podcasters. The company operates through a complex ADR/VIE structure where U.S. investors hold American Depositary Receipts that represent shares in a Cayman Islands shell company, which in turn has contractual agreements with the actual China-based operating business. Sound Group is controlled by Chinese insiders through Class B super-voting shares with a 10:1 voting ratio, effectively excluding U.S. retail investors from meaningful governance control.
Key Points from the Report
Missing Cash and Auditor Flight - RMB 90.7M in deposits at a "third-party financial institution" could not be confirmed or recovered and was written off as a total loss, leading to Big Four auditor PwC Zhong Tian resigning in December 2024 after disputes over cash confirmations
Extreme Revenue Concentration Risk - Over 95% of revenue depends on virtual gifts, which are under direct regulatory attack by Beijing authorities who have been tightening rules since 2021, including capping tip amounts and forcing identity disclosure requirements
ADR/VIE Structure Trap - U.S. investors own shares in a Cayman Islands shell company with no direct ownership of the actual China business, meaning if Beijing invalidates the Variable Interest Entity contracts, American shareholders would be left with worthless paper
Insider Control Through Super-Voting Shares - Chinese insiders including Jinnan Lai, Ning Ding, Matrix Partners China, and TMT General Partner maintain effective control through Class B shares, leaving U.S. investors powerless despite providing the capital
Regulatory Timing Risk - The SEC formed a Cross-Border Task Force in September 2025 specifically targeting foreign small-cap ADRs involved in "pump-and-dump" schemes, with Sound Group fitting the exact profile of companies under scrutiny
Read our full summary here
Wolfpack Research Report on Faraday Future Intelligent Electric Inc. (NASDAQ:FFAI)
Report Impact on Stock Price
FFAI shares posted a modest 3.0% gain to $1.72 from the $1.67 baseline, shrugging off Wolfpack Research's explosive allegations about founder Jia Yueting's fraudulent operations. Despite Wolfpack's detailed exposure of fake preorders and rebranded Chinese vehicles, the stock's brief 2.4% decline to $1.63 on publication day was quickly reversed, possibly reflecting the market's view that negative sentiment was already well-reflected in the sub-$2 share price.
Who is Faraday Future Intelligent Electric Inc.?
Faraday Future Intelligent Electric Inc. is a NASDAQ-listed electric vehicle company founded and controlled by Jia Yueting (YT), who fled China in 2017 to escape creditors and regulators. Despite burning through $4.4 billion in funding over nearly a decade, the company has delivered only 17 vehicles total. FFAI operates primarily by rebranding Chinese vehicles (specifically Wey Gaoshan vehicles with FFAI logos) rather than manufacturing original products. The company is controlled through what Wolfpack Research describes as YT's "mafia" of trusted associates and has a current market cap of $245.2 million.
Key Points from the Report
Fraudulent Vehicle Claims - The company's "new" EV minivan announced in 2025 is actually a rebranded Chinese Wey Gaoshan vehicle with FFAI logos swapped in, not an original design or manufacturing achievement
Fake Preorder Scheme - All 10,000+ claimed preorders are non-binding with no financial commitment, and 1,000 of them came from Nature's Miracle, a penny stock company with less than $10,000 in cash owned by YT's business school classmate
SEC Enforcement Action - The company received a Wells Notice from the SEC indicating likely enforcement action, while YT allegedly committed bankruptcy fraud by hiding $1.2 billion in Lucid stock from creditors
Dismal Operating Performance - After burning $4.4 billion in investor funding, FFAI has delivered only 17 total vehicles, demonstrating complete failure to execute on manufacturing and business operations
Criminal Leadership Background - Founder Jia Yueting is banned for life from Chinese securities markets, was fined $37 million for fraud, and fled China in 2017 to escape legal consequences while owing creditors billions of dollars
Read our full summary here
Snowcap Research Report on FTAI Aviation (NASDAQ:FTAI)
Report Impact on Stock Price
FTAI shares demonstrated resilience with a 2.1% gain to $171.66 from the $168.12 baseline despite Snowcap Research's allegations of misleading cash flow metrics. While Snowcap's analysis initially drove shares down 4.8% to $160.00 on publication day, the stock's recovery suggested investors either found merit in management's accounting methodology or viewed the aviation leasing company's underlying business fundamentals as sound regardless of cash flow presentation concerns.
Who is FTAI Aviation?
FTAI Aviation Ltd. is a NASDAQ-listed aerospace leasing and services company that focuses on engine leasing and maintenance services for the aviation industry. Led by CEO Joe Adams, the company operates by leasing aircraft engines and providing aerospace products to airlines and other aviation companies. FTAI has built its reputation around what it claims to be strong cash flow generation, with the company maintaining a fleet that was reduced from 690 engines in FY24 to approximately 623 engines by H1 2025, representing a 10% fleet reduction in just six months.
Key Points from the Report
Misleading Cash Flow Metrics - FTAI reported $370M in "Adjusted Free Cash Flow" for H1 2025, but Snowcap Research calculates the true operational cash flow at only $210M after removing fleet liquidation proceeds and one-off insurance payments
Fleet Liquidation Strategy - The company has been systematically selling off its engine fleet, with 67 engines (10% of total fleet) liquidated in just six months, using these asset sales to artificially inflate reported cash flow metrics
Rising Inventory Costs Per Engine - Inventory per engine has increased 44% from $3.2M to $4.6M, indicating potential efficiency problems and impairment risks in the underlying business operations
Leadership Contradictions - CEO Joe Adams stated that selling $200M of assets should require buying $200M of replacement assets for "intellectual honesty," yet FTAI's own methodology contradicts this principle by treating asset sales as operating cash flow
Corporate Governance Red Flags - The company recently changed auditors, which Snowcap views as another warning sign given the accounting concerns about FTAI's financial reporting practices and cash flow presentation methodology
Read our full summary here
August saw 68% of activist short targets decline with some experiencing significant drops, find out who earned Short King of the Month and discover which sectors and market caps drew the most attention from short sellers this summer.
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4:31 PM • Sep 12, 2025
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32 RepliesNew Activist Researcher Alert
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4:48 PM • Sep 3, 2025
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20 RepliesOther News
Faraday Future Threatens Legal Action Against Wolfpack Research - FFAI announced it has retained Paul Hastings LLP and plans to file lawsuits against Wolfpack Research while making formal SEC submissions, claiming the short report contains "false, misleading, and defamatory statements" designed to manipulate stock prices for financial gain as part of the company's ongoing "Anti-Illegal Short-Selling Counterattack" campaign.
GEO ExPro today published coverage of Iceberg Research's report on The Metals Company (TMC), which compared the deep-sea mining firm to failed predecessor Nautilus Minerals and estimated a negative $721 million net present value for TMC's nodule project, despite the stock's previous 290% surge following regulatory developments.
A Delhi court temporarily restrained five journalists and three websites from publishing allegedly defamatory material about Gautam Adani's Adani Enterprises, with the company citing damage from reports including Hindenburg Research's January 2023 allegations of accounting fraud and precarious financial footing that have allegedly hindered the conglomerate's ability to raise funds and delayed development timelines.
SEC Dismisses Case Against Former Nikola CEO Trevor Milton - The Securities and Exchange Commission moved to dismiss its 2021 fraud case against Nikola founder Trevor Milton, who had been convicted of misleading investors about the company's electric truck technology following Hindenburg Research's devastating 2020 report that exposed fabricated demonstrations, with Milton receiving a presidential pardon from Trump earlier this year before Nikola filed for Chapter 11 bankruptcy in February.
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