Investing.com -- Shares of Gorilla Technologies (NASDAQ:GRRR) plummeted 15% following allegations from short seller Citron Research. The noted short-selling entity cited concerns over potentially misleading statements and omissions by the tech company, which could significantly impact investor decisions.
The driver behind the sharp decline was a post by Citron Research, which urged the U.S. Securities and Exchange Commission (SEC) to halt trading of Gorilla Technologies’ stock. Citron’s accusation points to recent press releases from Gorilla Technologies that boast of a purportedly massive deal with Renato da Cruz Costa, a figure entangled in numerous lawsuits in Brazil related to embezzlement and financial default. Citron’s statement highlighted the disparity between the company’s grandiose claims of leadership in AI-driven solutions and its actual research and development expenditure, which they describe as "negligible."
Citron’s critical assessment of Gorilla Technologies’ press releases suggests that the company may have provided false or misleading information in violation of Rule 10b-5, which is designed to protect investors from fraud in securities transactions. The short seller’s report also casts doubt on the company’s valuation claims, particularly the mention of an upcoming token valuation in the trillions, which Citron deems absurd.
The allegations have raised serious questions about the validity of Gorilla Technologies’ public statements and the robustness of its business dealings. Investors reacted swiftly to the news, leading to a significant sell-off in the company’s shares.
At this time, there is no official statement from Gorilla Technologies addressing Citron’s claims or any response from the SEC regarding potential enforcement action. As the situation unfolds, market participants will be closely monitoring the company’s next moves and any regulatory responses that may arise.
For now, Gorilla Technologies faces a challenging period as it navigates the fallout from these allegations and works to restore investor confidence. The impact of Citron’s report is a stark reminder of the influence that short sellers can have on market perceptions and the importance of transparent and accurate corporate communication.
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