Tempus AI jumps after hit from short seller’s report
The stock is up more than 90% this year.
Shares of Tempus AI, an unprofitable vendor of cancer screening tests that also licenses data for use in drug discovery, soared on Monday, erasing much of the loss it suffered after a short seller released a searing analysis of the stock last week.
Since debuting less than a year ago, the shares have become something of a favorite of retail traders, as well as a target of short sellers. More than 20% of the company’s float is in the hands of shorts.
One of those shorts, Spruce Point Capital, released a report on Wednesday saying “investors should focus on its aggressive accounting, financial engineering, [and] related party dealings,” which knocked the stock down nearly 20%.
Tempus declined to comment on the report and said it “remained focused on delivering shareholder value, taking advantage of the enormous opportunity of bringing AI to healthcare.” The stock is up more than 90% year to date.
But the surge in Tempus shows the risks of short sellers directly confronting a favorite of often tribal retail stock traders, who can react to short sellers’ critiques of companies by rallying each other to hold the shares rather than selling on potential risks that the shorts are spotlighting.
