Market Overview

Citron Calls Ubiquiti Networks A 'Total Fraud'

Share:
Citron Calls Ubiquiti Networks A 'Total Fraud'
Related UBNT
Roku, Snap The Top Stocks Among Short Sellers
Left Lets Loose, Leaves Ubiquiti Investor Day Convinced 'Company Is Committing Fraud'
The Vetr community has downgraded $UBNT to 4-Stars (Vetr)

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

Latest Ratings for UBNT

DateFirmActionFromTo
Aug 2017Deutsche BankMaintainsHold
Feb 2017Credit SuisseDowngradesNeutralUnderperform
Oct 2016JMP SecuritiesUpgradesMarket UnderperformMarket Perform

View More Analyst Ratings for UBNT
View the Latest Analyst Ratings

Posted-In: Analyst Color News Short Sellers Short Ideas Previews Events Analyst Ratings Movers Best of Benzinga

 

Related Articles (UBNT + TWTR)

View Comments and Join the Discussion!
Loading...

Partner Center

Loading...