Blue Orca Report on STEM Misleading Investors Case

On January 11, 2023, short-seller Blue Orca issued a report concluding that  STEM is financing its flagship customer to purchase energy storage systems from STEM.  

"Rather than a “big win” and proof that STEM could compete for big utility-scale projects, we think STEM won its supposed flagship deal by surreptitiously paying for it" stated by Blue Orca.
As the report stated, STEM’s software business is a mirage, and the Company is misleading investors by disguising service revenues from leasing hardware as software revenues.  
Apart from a busted recent acquisition, almost all of STEM’s purported software revenues are derived from the misleading categorization of system leases as ‘software’ revenues.  
87% of these leased energy storage systems are not even owned by STEM, but by unconsolidated special purpose vehicles.  
In reality, STEM’s purportedly special software business generates a tiny fraction of the revenue claimed by the Company.  
The remaining portion of STEM’s purported “software” revenues are derived from the early 2022 acquisition of AlsoEnergy.  The Company grossly overpaid for the deal, and in its latest quarterly earnings call, STEM warned that AlsoEnergy’s revenues were shrinking. 
According to the report, this explains STEM’s audit warnings over revenue recognition and the strange internal control and accounting deficiencies revealed in SEC filings. 

If the report is based on true facts, then Investors have every reason to suspect the Company and its Management of gross violations, which have led and continue to depreciate the value of their shareholding.
 

 

Case Status

Attorney Investigation

Alleged Offence

Mismanagement,

Misleading Statements,

Financial Misrepresentation,

Fraud,

Failure to Disclose,

Malpractice,

Negligence,

Breach of Fiduciary duty,

Omissions

Suspected Party

Directors,

Management,

Shareholder,

Investment Bank,

Service Provider,

Other

Security Type

Stocks

Trade Direction

Long

Shock Event Date

11 January 2023

Blue Orca Report on STEM Misleading Investors Case

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