Singularity Future Technology (SGLY) Stock Plunges 30% on Hindenburg Short Report

Today, shares of Singularity Future Technology (NASDAQ:SGLY) stock fell as much as 32% in premarket trading after Hindenburg Research released a short report on the company. In the report, the short seller characterizes CEO Yang Jie as a fugitive on the run from Chinese authorities.

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Allegedly, Jie operated a $300 million Ponzi scheme which affected over 20,000 victims. Hindenburg says Jie then fled to the United States while at least 28 other participants in the scheme went to prison. The firm has confirmed with Chinese media and its “own checks” that the CEO currently has an outstanding arrest warrant in China.

Here’s what investors should know about SGLY stock and the short report.

SGLY Stock: Hindenburg Releases Short Report

After fleeing to the United States, Jie “allegedly forged Chinese state documents” to hide his checkered past. Hindenburg notes that “Chinese police have added forgery to his list of suspected crimes.”

In November 2021, Jie took over as CEO of Singularity and transferred the company’s focus from logistics to cryptocurrency. In the month before, the company had entered into a joint venture to produce crypto mining equipment. By January 2022, Singularity had received a $200 million equipment order from SOS Limited (NYSE:SOS).

Hindenburg is skeptical of this quick production and transition time. The short seller states:

“Singularity apparently expects investors to believe that it engineered, designed, tested, began to mass-produce, and sold hundreds of millions worth of crypto miners all within 3 months of its announced business pivot.”

Furthermore, Hindenburg claims the crypto mining equipment deal is a “brazen undisclosed related party deal.” This is because Jie’s wife has served as vice president of the SOS subsidiary that ordered the equipment. In addition, the Singularity CEO “also controls an entity based at the exact same address as the SOS subsidiary.”

Hindenburg Questions Singularity’s Crypto Mining Equipment

Meanwhile, Hindenburg has doubts that Singularity’s “proprietary” mining equipment ever existed. The firm alleges that photos and descriptions of the equipment “match precisely with another brand called KOI Miner.”

Last month, Singularity also announced a partnership of up to $250 million with power producer Golden Mainland. However, Golden’s website was registered just a day prior to the announcement. The company was also incorporated just six months prior. Hindenburg has found “no indication” that Golden Mainland owns energy assets. It has also found “no evidence” of Golden Mainland’s headquarters or employees, except for its founder’s email address.

Hindenburg has shared its findings with authorities and the Nasdaq. The firm is short SGLY stock.

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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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