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id: 510, Created by Stan Vick, Scout
TWST Scorpion Fraud Accusations
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On November 15, 2022, short seller activist Scorpion Capital published a report alleging that Twist is “a cash-burning inferno that is not a going concern.” Specifically, Scorpion alleged that,
- Twist’s purported DNA chip technology is a “farce” comparable to Theranos Inc.’s now infamous non-existent blood-testing technology, and the Company’s growth and revenues are unsustainable, among other issues.
- The Company is perpetuating its fraud through false reporting of capital expenditures and gross margins which Scorpion claims are actually negative. Indeed.
- No evidence that the Company is preparing to begin manufacturing there, suggesting that the Company is using the facility to hide large operating expenses as fraudulent capital expenditures.
- The Company’s growth is dependent upon unsustainable pricing strategies, such as using below-cost prices to undercut competitors by as much as 70% to 85%.
The Scorpion Report concluded that Twist is “operating a Ponzi-like scheme that will end in bankruptcy.”
On this news, Twist’s stock dropped over 19% on November 15, 2022, wiping out more than $420 million of Twist's capitalization.
Taking all accusations into account, Investors have reasons to suspect that the Company and its Leaders breached their fiduciary duties, seriously damaging shareholders.
Failure to Disclose,
Breach of Fiduciary duty
Shock Event Date
15 November 2022
12 December 2022
Lead Plaintiff Deadline
10 February 2023
Hon. Edward J. Davila