The squeeze play behind this Australian retailer
There’s a reason why this stock’s shares are heavily lent out to short speculators: the company has all the earmarks of a short-term pump. This Australia-based retailer of fitness equipment reported just $4.8 mln in sales in its fiscal 2023, ending June 30, 2023. The company IPOed on Nasdaq in August 2023, then sales collapsed by 30%, and a key business line shut down. Yet the company trades $7 mln a day. Some have plausibly alleged that this is due to the network of Chinese promoters who lurk just behind the market action.
The company has seen tremendous growth in two key areas: shares outstanding and consulting fees paid to dubious “consulting firms assisting the company in business development and identifying grow opportunities.” We think this company reeks of stock promotion.