(Reuters) – Hindenburg Research and Culper Research short sellers said Friday that they have taken a short position on the stock of Chinese blockchain company SOS Ltd, putting the company’s shares down 23%.
In two separate reports, they raised concerns ranging from regulatory risk to false allegations of allegations by the company about their business.
SOS, formerly a consumer loan company called China Rapid Finance, could not be immediately reached for out-of-hours ideas in China.
SOS shares have almost doubled in value this year since it outlined plans to invest in cryptocurrency on Jan. 13, benefiting from an increase in institutional support for bitcoin and other digital assets.
“Blockchain-linked stocks have been running lately, swept up in bitcoin euphoria breaking full-time highs. $ SOS has ridden this wave, ”Hindenburg short seller said in a tweet.
The seller briefly said he visited the address listed as head office in the company’s management filing and found it to be a hotel.
One of the allegations made by Culper is that SOS is not actually on the cryptocurrency mining platforms they said it bought.
Reporting by Munsif Vengattil in Bengaluru; Edited by Ankur Bannerjee, Shounak Dasgupta and Arun Koyyur