QQQ
-7.56
406.32
-1.9%
BTC/USD
-706.77
54014.26
-1.29%
DIA
-8.82
366.85
-2.46%
SPY
-10.05
479.49
-2.14%
TLT
+ 3.71
143.11
+ 2.53%
GLD
-0.24
167.36
-0.14%

Citron Calls Ubiquiti Networks A 'Total Fraud'

by
September 18, 2017 12:22 pm
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More

On Wall Street, it doesn’t get much worse than the F-word. Ubiquiti Networks Inc (NASDAQ:UBNT) shares are down more than 6 percent Monday after high-profile short seller and Citron managing editor Andrew Left called the company a “total fraud.”

Left pointed out some suspiciously impressive metrics from Ubiquiti, including 33.5-percent operating margin and 49.2-percent return on equity, as the basis of his bearish thesis. “Either Robert Pera is the best CEO in networking equipment, or Ubiquiti is committing FRAUD,” Left wrote.

Secret Sauce

Left also called into question what Ubiquiti describes as its “evangelical community” of users, who allow the company to reduce advertising and customer service costs. According to Left, these claims are exactly the type of “secret sauce” claims that are typical of corporate frauds.

“While we do believe that at six or seven years ago Ubiquiti may have had an engaged WISP community, the story is now as implausible as the rest of the bull— UBNT tells Wall Street,” Left wrote.

Related Link: Popular Index ETF Tops This Week's Short-Selling List

Corporate Culture

Left also points out what he says are “shady” business partners, lack of domestic cash balances, elevated corporate turnover and an “underbelly of corrupt corporate culture” as evidence of deception at Ubiquiti.

“The holes in their story are expanding daily and it is only time before the SEC launches the formal investigation and Ubiquiti will go down in infamy amongst the many other Wall Street Frauds,” Left concluded.

CEO Fires Back

In response to the accusations, Ubiquity CEO Robert Pera posted a succinct denial on Twitter:

Following Monday’s sell-off, Ubiquity shares are now down 12.4 percent in 2017. The company is holding a pre-scheduled investor meeting on Sept. 26, which will include a Q&A session. 

Related Link: Juniper Research Thinks There Will Be $1 Trillion In Crypto Transaction Value By Year's End

________

Image Credit: By Azcarlos2 (Own work) [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC BY-SA 4.0-3.0-2.5-2.0-1.0 (http://creativecommons.org/licenses/by-sa/4.0-3.0-2.5-2.0-1.0)], via Wikimedia Commons

For the latest in financial news, exclusive stories, memes follow Benzinga on Twitter, Facebook & Instagram. For the best interviews, stock market talk & videos, subscribe to Benzinga Podcasts and our YouTube channel.


Related Articles

Citron's Andrew Left Sees Snap As A 'Much More' Compelling Investment Than Twitter

Citron's Andrew Left Sees Snap As A 'Much More' Compelling Investment Than Twitter

At A Loss For Holiday Gift Ideas? Here're Some Suggestions For You

At A Loss For Holiday Gift Ideas? Here're Some Suggestions For You

After the atypical 2020 holiday season, where purchases were made online, in-person shopping has returned with 2021. In fact, customers have the option of capitalizing on the best of both the worlds. read more
Twitter Stock Sinks After Q3 Earnings: 5 Analysts React To Impact Of iOS Privacy Changes

Twitter Stock Sinks After Q3 Earnings: 5 Analysts React To Impact Of iOS Privacy Changes

Twitter Inc (NYSE: TWTR) shares tumbled 9.6% on Wednesday after the company disappointed the market with lackluster sales guidance. read more
Snap's Earnings Miss Is Not Facebook's Gain: Why This Analyst Cut Stock Price Target, Earnings Outlook

Snap's Earnings Miss Is Not Facebook's Gain: Why This Analyst Cut Stock Price Target, Earnings Outlook

Snap Inc (NYSE: SNAP) shares plunged 23.2% on Friday morning following a disastrous third-quarter earnings report on Thursday afternoon and other social media stocks traded lower in sympathy. read more