Weekly Wrap-Up: Sunday, 9/28/25
Activ8 Weekly: Canadian Lenders Under Fire, Luxury Brands Caught in Crosshairs
Short sellers came out swinging last week with five reports published, targeting everything from a Canadian subprime lender to Italian luxury fashion. The week delivered a masterclass in market reactions: goeasy and Brunello Cucinelli both shed roughly 15-20% following fraud and sanctions allegations, while Aya Gold & Silver initially cratered on resource estimate concerns before recovering some of its losses. In a twist, Brera Holdings, accused of being a dilution machine masquerading as a soccer company, actually surged 49% by week's end, proving that in microcap land, even a damning short report can fuel a speculative frenzy. U.S. Gold Corp shrugged off dilution warnings entirely, posting a modest gain. The divergent outcomes underscore a familiar pattern: large-cap companies with credible accounting or regulatory issues face immediate selling pressure, while small-cap promotional vehicles often defy gravity regardless of the evidence presented.
Fugazi Research Report on Brera Holdings PLC (NASDAQ: BREA)
Report Impact on Stock Price
Fugazi Research's report on Brera Holdings had a counterintuitive effect, with the stock initially dipping 8.4% intraday from $16.60 to $15.20 before surging. The stock closed up 12.0% at $18.60 on the day of publication, and by week's end had skyrocketed to $24.71—a remarkable 48.9% gain from pre-report levels. The positive price action suggests the market either dismissed Fugazi's allegations of the company being a "crypto pump machine" or that the report inadvertently drew attention that fueled further speculative trading in the already volatile microcap.
Who is Brera Holdings PLC?
Brera Holdings is an Irish-based holding company listed on NASDAQ that initially positioned itself as a "social-impact soccer company" with investments in Italian sports teams including Juve Stabia football club and UYBA Volley. The company has since pivoted to become a crypto treasury vehicle under Executive Chairman Dan McClory, who controls 84% voting power through super-voting shares while also serving as Head of China at Boustead Securities.
Key Points from the Report
The Crypto Pump Playbook: Brera executed a classic speculative microcap strategy, pivoting from minimal-revenue soccer holdings to announcing a $300M crypto treasury accepting Solana, USDC, USDT, and USD, triggering a 592% intraday surge on September 18, 2025.
Systematic Dilution Machine: Share count grew 7x between IPO and mid-2025 through aggressive warrant and placement issuances, with shareholders approving 10 billion new Class B shares in September 2025 alongside 5-year unlimited issuance authority.
Manufactured Squeeze Conditions: A June 2025 reverse split created a microscopic 710,000-share tradable float with triple-digit borrow fees, engineered to facilitate extreme price volatility and liquidity events at inflated valuations.
Conflicted Capital Markets Structure: McClory's dual role as Chairman and Boustead affiliate triggered FINRA Rule 5121 conflicts, while Boustead's history includes 2022 sanctions and underwriting China Liberal Education (CLEU), which lost 98% of value amid pump-and-dump charges.
Narrative Over Substance: The Italian sports holdings contribute minimal revenue but provide publicity cover for capital markets activities, with high-profile PIPE participants like Cantor Fitzgerald and ARK Invest lending credibility to what Fugazi characterizes as a "capital-markets machine masquerading as a social-impact company."
Read our full summary here
Jehoshaphat Research Short Report on goeasy Ltd. (TSE: GSY)
Report Impact on Stock Price
Jehoshaphat Research's report on goeasy triggered an immediate 16.1% intraday decline from the prior close of CAD $204.51 to an intraday low of CAD $171.50, as allegations of hidden credit losses spooked investors. The stock closed the day of the report at CAD $184.33, down 9.9% from the previous close. By week's end, shares had fallen further to CAD $174.01, representing a 14.9% decline from pre-report levels as the market digested claims of approximately $300 million in improperly delayed losses.
Who is goeasy Ltd.?
goeasy Ltd. is a Canadian subprime consumer lender listed on the Toronto Stock Exchange with a $5.1 billion CAD loan portfolio focused on installment loans, auto finance, and home equity products. The company serves borrowers with a median credit score of 585 (TransUnion) or approximately 558 FICO equivalent, making it one of the lowest credit quality portfolios among subprime peers. Both the CEO and CFO announced departures in 2024-2025 amid the company's first earnings miss in three years.
Key Points from the Report
Suppressed Loss Rates Through Accounting Changes: Jehoshaphat estimates goeasy's true net charge-off rate should be approximately 15% versus the reported 8.9%, with the company systematically delaying roughly $300 million in credit losses through removal of the 180-day automatic charge-off rule for secured loans and aggressive delinquency suppression techniques.
Exploding Interest Receivable as Red Flag: Interest receivable as a percentage of quarterly income surged to 42% versus a historical range of 14-17%, indicating a massive buildup of uncollected interest from borrowers who are effectively delinquent but not yet classified as such on the books.
Suspicious Risk Classification Changes: Despite lending to borrowers with declining credit scores, goeasy suddenly moved 8% of its loan portfolio to a "low-risk" category between Q1 2024 and Q2 2024, which conveniently reduced required loss provisions while defying economic logic.
$109 Million in Zombie Loans: The company now carries $109 million in loans that are 151+ days delinquent, a massive surge following accounting rule changes that previously would have resulted in automatic charge-offs under the old 180-day policy for secured loans.
Leadership Exodus Amid Accounting Pivot: CEO Jason Mullins departed January 2025 after announcing his exit in July 2024 (shortly after major accounting changes began), while CFO Hal Khouri announced departure for November 2025 with no interim replacement identified—both executives made their first-ever stock sales shortly before or after announcing departures.
Read our full summary here
BMF Reports Short Report on U.S. Gold Corp (NASDAQ: USAU)
Report Impact on Stock Price
BMF Reports' critique of US Gold Corp as a "financing vehicle wrapped in a gold narrative" had minimal immediate impact, with shares dipping just 5.5% intraday from $15.97 to $15.09. The stock closed nearly flat at $15.12, down only 5.3% on the day of publication. By week's end, shares had actually risen to $16.23, posting a modest 1.6% gain from pre-report levels, suggesting investors were either unfazed by BMF's dilution warnings or that the gold exploration narrative remained compelling despite the report's allegations.
Who is U.S. Gold Corp?
U.S. Gold Corp is a NASDAQ-listed gold exploration company that originated as Dataram Corporation, a semiconductor business, before executing a 2017 reverse merger to become a gold mining venture. The company has generated zero revenue in over eight years of operations and focuses on the CK Gold Project in Wyoming, which requires an estimated $635 million in capital expenditures to develop. With only $8.2 million in cash and $93.4 million in accumulated losses, USAU faces massive financing hurdles under CEO George Bee and Chairman Luke Norman.
Key Points from the Report
Zero Revenue, Pure Dilution Machine: USAU has generated no revenue since its 2017 reverse merger, instead relying on continuous equity raises that increased the share count from 2.3 million in 2020 to 14 million in 2025—a 6x dilution—with a $150 million shelf registration ready for additional issuances.
Impossible Financing Math: The CK Gold Project requires $635 million in capital expenditures, but USAU has only $8.2 million cash and access to a $150 million shelf offering, leaving a $477 million funding gap that guarantees catastrophic shareholder dilution or project failure.
Promotion-Then-Raise Playbook: BMF Reports documents a pattern of paid stock promotions ($28K to RagingBull in 2023, $15K for Ryan Zinke campaigns in 2019, $4K to Stock Dads in 2025) immediately followed by equity offerings, using promotional spikes to maximize proceeds from retail investors.
Barry Honig Legacy and Insider Exits: The company's origins trace to notorious stock promoter Barry Honig's network, with founder Edward Karr receiving a $180K consulting contract after resignation while Chairman Luke Norman exercised warrants in 2025 and immediately sold half via cashless exercise.
Going Concern Warnings and Auditor Red Flags: With $93.4 million in accumulated losses and burn rates requiring constant capital raises, auditors have issued going concern warnings while BMF Reports projects downside price targets ranging from $8.00 (base case) to $3.00 (crash scenario) versus the current ~$15 price, representing 47-80% downside risk.
Read our full summary here
Blue Orca Capital Short Report on Aya Gold & Silver (TSE: AYA)
Report Impact on Stock Price
Blue Orca Capital's explosive allegations of "50+ million phantom ounces" at Aya Gold & Silver triggered a severe 21.9% intraday collapse from CAD $15.30 to CAD $11.95. The stock closed at CAD $12.93, down 15.5% on the day of publication, as investors absorbed claims of potentially fraudulent resource estimates. By week's end, shares had partially recovered to CAD $14.65 but remained down 4.2% from pre-report levels, indicating lingering concerns about the company's reserve calculations and operational performance.
Who is Aya Gold & Silver ?
Aya Gold & Silver is a Canadian silver mining company listed on the TSX with a CAD $2.2 billion market capitalization, operating the Zgounder mine in Morocco. Under CEO Benoit La Salle, who joined in 2020, the company launched an ambitious expansion plan and claimed to more than double its silver resource estimate to 102 million ounces by December 2021. The company markets itself as a high-grade silver producer, though operational performance has significantly underperformed projections despite favorable silver prices.
Key Points from the Report
Alleged 100%+ Resource Inflation: Blue Orca alleges that Aya's December 2021 resource estimate, which claimed 102 million ounces of silver (up from 44 million ounces nine months earlier), may contain approximately 50+ million phantom ounces created through computer model manipulation rather than legitimate drilling discoveries.
Conflicted Geologist Prepared Critical Estimate: The controversial December 2021 resource estimate was prepared by Marc-Antoine Audet, CEO La Salle's long-time business partner across multiple public companies who shares the same Quebec office address, rather than the independent P&E Mining Consultants who had prepared the earlier March 2021 estimate.
Collapsing Operational Performance: Head grades have plummeted 62% from their Q4 FY2022 high to current levels of 140g/t (approximately 50% below mine plan projections), while FY2024 operating cash flow was negative $8.6 million versus $120 million forecasted when silver was at $22—despite silver now trading at $44.
Statistically Impossible Resource Changes: At the same 50g/t cut-off grade, tonnage decreased 12% (from 12.8Mt to 11.3Mt) between the two models while grades somehow surged 81%—a pattern Blue Orca characterizes as inconsistent with legitimate resource extension and indicative of model manipulation.
Production Tracking 75% Below Projections: Current production and cash flow performance is tracking approximately 75% below projections made when silver prices were significantly lower, suggesting the claimed resource either doesn't exist in the grades reported or is not economically extractable as represented.
Read our full summary here
Morpheus Research Short Report on Brunello Cucinelli (OTCMKTS: BCUCY)
Report Impact on Stock Price
Morpheus Research's sanctions violation allegations hammered Brunello Cucinelli, with shares plunging 21.2% intraday from $12.15 to $9.58. The luxury brand closed at $10.14, down 16.5% on the day Morpheus published evidence of alleged continued Russian operations. By week's end, the stock had recovered slightly to $9.76 but remained down 19.7% from pre-report levels, as investors weighed the reputational and regulatory risks of the alleged EU sanctions violations against the company's premium valuation.
Who is Brunello Cucinelli?
Brunello Cucinelli is an Italian luxury fashion company founded in 1978 and listed on the Borsa Italiana, specializing in "quiet luxury" cashmere and high-end ready-to-wear with a market capitalization of approximately €7 billion ($8.2 billion). The family-controlled company is led by founder and Executive Chairman Brunello Cucinelli, who espouses a philosophy of "Humanistic Capitalism" from the company's headquarters in Solomeo, Umbria. The brand trades at a 105% premium to luxury peers with a forward P/E of 46x, the highest valuation multiple in the luxury sector.
Key Points from the Report
Active Russian Operations Despite Sanctions Claims: Morpheus Research's secret shoppers made purchases at allegedly "closed" Moscow stores in 2025, with receipts issued directly by the Russian subsidiary and products manufactured in 2024-2025, contradicting management claims of minimal Russian presence and compliance with EU luxury goods sanctions.
715% Surge in Russian Export Volume: Russian customs data shows export volume exploded from 7,400 kg in 2021 to 53,000 kg in 2023, with over 110,000 kg imported across 6,500+ shipments since sanctions began—while management claimed Russian revenue dropped from 9% to just 2% of total sales, a mathematical impossibility according to Morpheus.
Systematic Sanctions Circumvention Network: Approximately 60 metric tons of Cucinelli products reached Russia through Lithuanian, Chinese, Iranian, and Hong Kong intermediaries post-sanctions, with some shipments declaring artificially low values, while the company maintained close relationships with Mercury Group's TSUM stores selling items priced thousands of euros above the €300 EU sanctions limit.
Aggressive Brand Dilution Through Discount Channels: Over 2,500 Cucinelli SKUs were found on discount websites (versus 21 for peer Loro Piana), with products appearing at TJ Maxx and discounts reaching 87% on platforms like Yoox and Saks, undermining the "quiet luxury" positioning while inventory days ballooned to 404 versus a 247-day peer average.
Misleading Investor Disclosures and Governance Issues: CEO Luca Lisandroni made contradictory public statements about Russian operations (from "customer care only" to "one-on-one sales activities"), while family members including the founder's daughters and their husbands control key board positions, and Russian buyers attended Milan Fashion Week buying sessions for S/S 2026 collections as recently as January 2025.
Read our full summary here
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Forbes Announces 23rd Annual Short Sellers Contest: Entries are now open for Forbes' "Short Sellers Don't Have Horns" competition, where participants pick a U.S.-traded stock expected to decline from October 3, 2025 to September 11, 2026. In the 2024-2025 contest, two winners tied for first place with 100% gains after their pick, Mullen Automotive, went bankrupt.
Short Seller Andrew Left Seeks Trump Administration Intervention: Citron Research founder Andrew Left, facing 18 counts of securities fraud for allegedly manipulating stocks through his public commentary, is hoping for clemency from the Trump administration after playing golf with the President and making appearances on Fox Business praising Trump's economic policies. Left's criminal trial is scheduled for March 2026, with prosecutors alleging he made insincere statements about stocks to profit from short-term price movements.
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