AI Stock: C3.ai Tumbles 26% On Kerrisdale Capital’s Letter To Auditor
Shares of C3.ai ( AI ) fell on Tuesday after Kerrisdale Capital said it had sent a letter to the software maker’s auditor, Deloitte & Touche, regarding “serious accounting and disclosure issues.” Kerrisdale Capital disclosed a short position in shares of AI last week.
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AI shares fell 26.3% to close at 24.95 on the stock market today.
Shares in C3.ai were up more than 200% in 2023 amid buzz over OpenAI, ChatGPT and AI-generating technology. C3.ai is one of many AI stocks to watch.
In a blog, Kerrisdale Capital said: “C3’s fiscal year ends on April 30 and we have asked Deloitte to review our letter in anticipation of its future work to conduct the company’s year-end audit.”
He continued: “In the paper, we discuss the very visible increase in unbilled receivables to levels we have never seen before in software companies. Vague, confusing and very disturbing and financial disclosures related to the company’s related party and very large client, Baker Hughes (BKR).
AI Stock: IPO in late 2020
Investor’s Business Daily contacted C3.ai for a response to the Kerrisdale Capital letter. C3. he has not answered.
Short sellers bet that stocks will fall. They borrow stocks they believe are overvalued and sell them immediately, hoping to buy the stock back for a lower price when they come back and pocket the difference.
Sahm Adrangi founded Kerrisdale Capital in 2009. Soon after, the investment firm targeted Chinese companies it claimed were fraudulent. Kerrisdale also recently took a short position in Uranium Energy ( UEC ).
C3.ai’s initial public offering in early December 2020 raised $651 million.
Further, the software maker helps companies build artificial intelligence applications. It targets the energy, financial services and defense markets.
Additionally, C3.ai maintains a Relative Strength Rating of 99 out of a possible 99, according to IBD Stock Check-up.
With Tuesday’s loss, AI stock fell below a buy zone. It has an entry point of 31.02.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
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