Weekly Wrap Up: Sunday 1/25/26
Wolfpack exposes FFRI's subsidy trick, Culper uncovers T1 Energy's hidden lawsuit, and Kerrisdale sees 80% downside in Affirm.
January kicked off with fireworks in the short selling world. Andrew Left's trial looms on the horizon (March 17), and his recent op-ed in the Wall Street Journal defending his practices has reignited debates about the line between legitimate research and market manipulation. Meanwhile, this week saw three new reports targeting companies across wildly different sectors: a Japanese cybersecurity firm accused of manufacturing a turnaround through creative accounting, an "American-made" solar company allegedly controlled by a Chinese entity, and a BNPL giant that Kerrisdale argues is really just a subprime lender in disguise. We're also working on some exciting new articles behind the scenes, so stay tuned for fresh content in the coming weeks.
This Week's New Reports
- 3 new reports spanning cybersecurity, solar energy, and fintech sectors
- Wolfpack Research targets FFRI Security (3692.T), alleging the company booked R&D subsidies as revenue to fake a turnaround; stock fell -3.5% for the week
- Culper Research alleges T1 Energy (TE) is operationally controlled by Chinese FEOC Trina Solar, with an undisclosed lawsuit from its only non-Trina customer; stock +2.7% for the week
- Kerrisdale Capital argues Affirm (AFRM) is a subprime lender masquerading as fintech, with 80% downside to fair value; stock shrugged it off, +0.5% for the week
- Mixed market reactions continue to define the activist space, with T1 Energy and Affirm both trading higher despite damaging allegations
New Activist Reports
FFRI Security, Inc.
3692.TTokyo Stock Exchange | Wolfpack ResearchJanuary 22, 2026
Stock Price Impact:
FFRI Security shares dropped sharply on report day, plunging over 10% intraday to a low of ¥8,380 before recovering to close down 3.9% at ¥8,960. The initial selloff reflected investor concern over Wolfpack's detailed allegations about aggressive accounting practices. However, the stock stabilized through week's end, closing at ¥8,990, down 3.5% from pre-report levels. This relatively contained decline suggests Japanese investors may be taking a wait-and-see approach, particularly given questions about how the company's new auditor will treat the contested subsidy accounting.
About FFRI Security, Inc.:
FFRI Security is a Tokyo-based cybersecurity company specializing in endpoint protection software, with its flagship product Yarai serving enterprise clients across Japan. Founded in 2007 and listed on the Tokyo Stock Exchange, the company has approximately 215 employees and a market cap of around ¥76 billion. FFRI has positioned itself as a player in Japan's national security infrastructure, participating in government-funded R&D programs through the Cyber Research Consortium (CRC). However, Wolfpack notes that Yarai licenses peaked in 2019, raising questions about the company's organic growth trajectory.
Key Points from the Report:
- FFRI books government R&D subsidies as topline revenue, unlike all 8 peer companies reviewed which treat subsidies as non-operating income
- Without subsidy revenue, core business sales actually declined 1% year-over-year, not grew 24% as reported
- The Cyber Research Consortium (CRC) was founded by FFRI and is managed by FFRI's President, creating significant related-party concerns
- FFRI capitalized ¥480M in CRC membership fees; if expensed, operating profit would decline 32%
- Company's prior auditor ASKA & CO was suspended for 6 months by Japan's FSA for "grossly improper" operations
- New auditor UHY Tokyo faces key question: will they approve the same aggressive accounting treatment?
- Stock has soared over 300% on perception of turnaround that Wolfpack argues is manufactured through accounting
- Government entity NEDO may scrutinize how CRC funds are being used amid declining R&D output
T1 Energy Inc.
TENYSE | Culper ResearchJanuary 21, 2026
Stock Price Impact:
T1 Energy experienced wild volatility on report day, plunging over 15% intraday to $7.01 as Culper's detailed allegations about Trina Solar control and an undisclosed lawsuit hit the market. However, in a now-familiar pattern for activist targets, the stock staged a remarkable recovery, closing down just 5.6% on report day and ultimately finishing the week up 2.7% from pre-report levels. The counterintuitive rally may reflect either skepticism about the short thesis or buyers stepping in ahead of potential 45X tax credit clarity. Notably, T1 has still not disclosed the RWE termination and lawsuit that Culper uncovered.
About T1 Energy Inc.:
T1 Energy is a Texas-based solar module manufacturer that operates a facility in Wilmer, Texas. The company positions itself as an American solar manufacturer eligible for valuable 45X manufacturing tax credits under the Inflation Reduction Act. T1 emerged from the failed EV battery SPAC FREYR, pivoting to solar after the battery business collapsed. Culper alleges the company is operationally and economically controlled by Trina Solar, a China-based entity classified as a Foreign Entity of Concern (FEOC), which would disqualify T1's products from domestic content bonuses and potentially expose the company to significant tariff liability.
Key Points from the Report:
- Trina Solar supplies 81% of T1's materials including solar cells, and Trina fees consumed 83% of T1's gross profit in the last nine months
- RWE Clean Energy terminated its offtake agreement on December 19, 2025 and sued T1 on January 7, 2026 for "fraudulent inducement and material breaches"
- T1 has not disclosed either the RWE termination or the lawsuit to investors
- CEO Barcelo and T1 received grand jury subpoenas related to SEC and DOJ investigations into undisclosed stock pledges and sales
- U.S. Customs probe disclosed in August 2025; trade data shows suspicious shift from importing "solar cells" to "glass" after June 2025
- $25 million unexplained gap between T1's reported sales to Trina and Trina's disclosed purchases from T1
- T1 owes Trina $277 million; estimated tariff liability ranges from $205M to $570M
- Former Trina director quoted: "It's a little bit smoke and mirrors because Trina is the sole provider of T1's product"
Affirm Holdings, Inc.
AFRMNASDAQ | Kerrisdale CapitalJanuary 21, 2026
Stock Price Impact:
Affirm shares barely flinched at Kerrisdale's bearish thesis, dipping just 1.5% intraday before closing report day in the green. By week's end, the stock was up 0.5% from pre-report levels, a stark contrast to Kerrisdale's $17 fair value estimate implying 80% downside. The market's dismissive response suggests investors remain confident in Affirm's growth narrative despite the detailed analysis comparing it to traditional subprime lenders. With 96% of transactions coming from repeat users and rising reliance on high-APR loans, the debate over Affirm's true nature continues.
About Affirm Holdings, Inc.:
Affirm is a San Francisco-based buy-now-pay-later (BNPL) company founded in 2012 by PayPal co-founder Max Levchin. The company serves approximately 24 million active users and partners with over 419,000 merchants to offer point-of-sale financing. Affirm went public in 2021 at valuations north of $40 billion before crashing 90%+ in 2022. While management positions Affirm as a fintech disruptor, Kerrisdale argues the company is fundamentally a balance-sheet lender with a median borrower FICO of 652 and 52% of loans going to borrowers below 660.
Key Points from the Report:
- 50% of Affirm's revenue now comes from interest income, up from 37% in FY2022, compared to 20% at peer BNPL companies
- Median borrower FICO score is 652; 52% of loans go to subprime borrowers below 660
- Effective leverage exceeds 6x once off-balance-sheet loans with retained credit exposure are included
- Loss reserves cover only ~2% of retained risk and ~1% of GMV, far below the 8%+ at peer consumer lenders
- 96% of transactions come from repeat users, a saturation signal suggesting limited room for new customer growth
- Kerrisdale values Affirm at $17 per share using a blended framework: 75% consumer lender P/B ratios, 25% fintech multiples
- Book value per share is just $9, compared to current trading price around $71
- Political risk: President Trump's call for 10% cap on credit card rates could extend to 36% APR BNPL loans
Activ8 Newswire
Recent articles and news from around the activist short selling world
Andrew Left: "I'm Being Prosecuted for the Opposite of Insider Trading"
Citron Research founder Andrew Left penned a Wall Street Journal op-ed defending his practices ahead of his March 17 trial. Left argues that his case is fundamentally different from insider trading, noting that he created public information rather than trading on private knowledge. His trial will test the boundaries between legitimate research and market manipulation.
Source: Wall Street Journal
Read Article →Muddy Waters' Defamation Suit Reveals Short Thesis on Portuguese Construction Giant
A new analysis from Brevarthan Research, a Substack focused on energy and industrials, examines the Carson Block defamation lawsuit against Mota-Engil. The suit inadvertently reveals Muddy Waters' short thesis on the Portuguese construction company, highlighting concerns about cash flow, debt levels, and related-party transactions.
Source: Brevarthan Research (Substack)
Read Article →Singapore's GIC Agent Fined in South Korea Short Selling Crackdown
A third-party agent acting for Singapore sovereign wealth fund GIC was fined 120.6 million won ($90,000) for naked short-selling violations in South Korea. GIC was among six global asset managers sanctioned as Korean regulators intensify oversight following the resumption of short selling last March. GIC stated it does not engage in uncovered short sales and will review processes with agents.
Source: Bloomberg
Read Article →Archer Aviation Stock Rebounds in 2026 After Short Seller Attacks
Archer Aviation shares have surged 17.8% in 2026 after falling 22.9% last year amid short reports from both Culper Research and Grizzly Research questioning the eVTOL company's commercialization timeline. Defense-tech enthusiasm and Archer's Anduril partnership appear to be lifting the stock despite ongoing concerns about path to FAA certification.
Source: Motley Fool
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