Hindenburg Research may be the most famous activist short-selling investment research firm in recent history. Where many short sellers run their due diligence, develop a trade thesis and execute behind the scenes, Hindenburg is happy to bring ts research to wider market attention. Hindenburg was instrumental in highlighting Nikola’s (NASDAQ:NKLA) blatant fraud and Adani Group’s ongoing accounting and stock market manipulations.

Where Hindenburg sets its sights, stocks tend to fall. Perhaps that is by design but it shows that Hindenburg also satisfies a core tenet of short-selling. Far from a malicious conspiracy, as meme stock bagholders will allege, short-selling helps identify market inefficiencies and improper valuation. The “deep research” by Hindenburg and others also protects investors from creative accounting and fraudulent activity.

Hindenburg Research set its sights on these three stocks next, suggesting there isn’t much hope for them moving forward.

Lifestance Health Group (LFST)

LifeStance Health Group (NASDAQ:LFST) is a mental health provider with a $2.3 billion market cap and 6,400 clinicians across 33 states. It is our first stock under fire from Hindenburg Research. Published on Feb. 1, LFST shares are actually up more than 10% since then. It indicates that wider market sentiment hasn’t yet turned against the company. Even so, that doesn’t mean Hindenburg Research is off base.

Despite an 18% annual growth in its clinician base, the company reported significant financial problems in its Q3 2023 report. Among the deficiencies were $188 million in losses over the past 12 months, $482 million in debt and lease obligations and a $716 million accumulated deficit. Given these figures, it is clear that LifeStance desperately needs fresh cash. It has a razor-thin cash balance of $42.6 million, a quarterly cash burn of $33.7 million and an expected $42 million in cash payments due by the end of Q1 2024 to settle ongoing litigation. Notably, the litigation in question alleges LifeStance misled IPO investors, which is a serious accusation that the company has had to respond to.

These issues are the most apparent and undeniable since they are black-and-white within LFST’s financial filings. Other problems include clinician retention, labor agreement violations and inappropriate management of controlled substances like Adderall and Xanax.

Renovaro (RENB)

Formerly known as Enochian Biosciences, Renovaro (NASDAQ:RENB) is a biotech company committed to curing cancers and infectious diseases. It is in Hindenburg Research’s spotlight based on its controversial ties with Dr. Serhat Gumrukcu, the biotech’s co-founder and largest shareholder. The Justice Dept. charged Gumrukcu over allegations of conspiracy to commit murder and “boasts” a history of fraudulent activities. Despite knowing about Gumrukcu’s fraudulent past and criminal charges, the company continued to collaborate with him. Renovaro’s lead candidate for a cure remains Gumrukcu’s cancer therapy, which CEO Dr. Mark Dybul continues to promote despite Gumrukcu’s imprisonment.

Adding to the controversy, Renovaro recently merged with GEDi Cube, a company described as an “AI Health” company. However, at the time of the merger, GEDi Cube was a two-month-old entity with no operational history, product or revenue. The merger negotiations and subsequent agreement, which saw Renovaro agreeing to pay $275 million for GEDi, raised further concerns about the company’s judgment and governance.

In promoting the GEDi deal, Renovaro “enlisted stock promoters, including one previously sanctioned by the SEC, to hype up the [deal] and pump shares to retail investors.” The company also touted a “strategic partnership” with Nvidia (NASDAQ:NVDA), which turned out to be a free program joined by over 17,000 companies.

EHang Holdings (EH)

EHang Holdings (NASDAQ:EH), a China-based aircraft company, specializes in electric vertical take-off and landing (eVTOL) aircraft. Before Hindenburg’s short report, the company was on a record run, returning more than 267% over the preceding year. Since then, shares are down about 30% but there’s little indication EH fixed any of the material issues Hindenburg brought up.

The company has reported net losses since its inception and trades at around 18x book value. This is a hefty premium compared to competitors Joby Aviation (NYSE:JOBY) and Archer Aviation (NYSE:ACHR). Both of those companies trade close to 4x book value.

Financially, EHang operates on a tight budget, investing just $97.4 million in cumulative R&D. This starkly contrasts with Joby and Archer, which have invested $761.9 million and $381.1 million, respectively. EHang also has just $44.9 million in cash reserves while its competitors have hundreds of millions of dollars available. That indicates a limited runway in the capital-intensive aviation industry.

Hindenburg also revealed that over 92% of EHang’s claimed 1,300+ unit pre-order books were based on problem deals. They are either “dead” or “abandoned,” are failed partnerships or are new customer entities with no discernible operations. EHang’s largest deal, a 1,000-unit pre-order from United Therapeutics (NASDAQ:UTHR), a biotech, accounts for approximately 74% of EHang’s total pre-orders. However, a former EHang employee claims the deal is “dead.” It suggests some creative accounting and flexible interpretation is going on at Ehang.

On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.