Prescience Point Capital Management Issues Negative Research Report on Enphase Energy, Inc. (NASDAQ: ENPH)
- Prescience Point believes that Enphase Energy's financial performance has been artificially inflated and its public statements filed with the SEC are wholly unreliable.
- Based on the findings of our thorough, on-the-ground investigation of ENPH's India operations, which included interviews of numerous former employees and industry participants, and our detailed analysis of the company's accounting and business practices, we believe that at least 39%, or $205.3 million, of ENPH's reported U.S. revenue is fabricated.
- Within days of the completion of our private investigation in India, ENPH executives and board members suspiciously sold $120.9 million worth of ENPH shares in the span of just fifteen days from June 1st to June 15th, and ENPH's previous largest shareholder sold its entire ~11% stake in just one day on May 20th.
- We urge the SEC, The Nasdaq Stock Market, Deloitte, Enphase's Board of Directors, and other authorities to immediately open an investigation of ENPH's accounting and disclosure practices.
- According to multiple former employees, a large portion of ENPH's astronomical growth over the past two years is attributable to accounting gimmicks that artificially inflate revenue and profits.
- Former employees in India have told our investigators that they believe that ENPH is utilizing an offshore finance and accounting team to help executives perpetrate potential accounting violations.
- The massive decrease in ENPH's costs of revenue per watt from Q3 2018 to Q3 2019 of 23.6%, or 37.6% on a tariff-adjusted basis, defy logic and puzzlingly occurred during the same time period that the company's products were subjected to tariffs of 25%.
- We have received data from large distributors of ENPH products in the U.S., accounting for roughly 69.5% of the distributor market, who reported growth in ENPH product sales that are far below what ENPH has reported.
- Prescience Point believes the evidence presented in this report could lead to multiple government investigations, a major accounting restatement, shareholder lawsuits and a delisting of ENPH shares from the Nasdaq.
BATON ROUGE, La., June 17, 2020 /PRNewswire/ -- Prescience Point Capital Management ("Prescience Point"), a private investment manager that focuses on investigations of public companies, published a negative research report today supporting its short position in shares of Enphase Energy, Inc. (NASDAQ: ENPH), a maker of microinverter systems for residential and commercial use based in Petaluma, CA.
Prescience Point has been closely scrutinizing Enphase for over two years and we believe the company's financial performance has become increasingly disconnected from reality since our initial reports were published in July 2018 and August 2018. Following our latest investigation, which included interviews of numerous former employees, we believe that Enphase's financial reports are not reliable, and that the 4,653% increase in its share price since CEO Badri Kothandaraman was promoted to CEO is unwarranted.
"The explosive growth that Enphase has reported to investors over the last two years is nothing but a sham which has lined the pockets of those at the top of the company," said Eiad Asbahi, Founder and Portfolio Manager of Prescience Point. "We believe the evidence presented in our report will result in multiple government investigations, a major accounting restatement, shareholder lawsuits and a delisting of ENPH shares from the NASDAQ."
Our research suggests that at least 39%, or $205 million, of US revenue reported by the company is potentially fabricated, as is a significant portion of the company's international revenue. Multiple former employees in India independently told our private investigators that Enphase was fabricating figures it reports publicly, and that the company is using overseas operations to help executives perpetrate potential accounting violations.
Our research also suggests that Enphase executives and board members, as well as its previous largest shareholder, likely learned of the existence of our private investigation. This is supported by the unprecedented number of shares these parties sold from late-May to mid-June, which is right around the time that our private investigation had wrapped up. Their timing and shear magnitude of sales appears to be a rush for the exits ahead of Enphase's coming downfall.
Click here to download Prescience Point's full report on Enphase [insert link].
Prescience Point has a short position in Enphase and stands to benefit if its share price falls.
About Prescience Point Capital Management
Prescience Point Capital Management is a private investment manager that employs forensic investigative techniques to unearth significant mispricings in global markets. The firm specializes in extensive investigations of difficult-to-analyze public companies in order to uncover significant elements of the business that have been overlooked or ignored by others. Their publicly-available research focuses on exposing corporate wrongdoing and has been followed by resignations of auditors, CEOs and CFOs, earnings restatements, SEC investigations and stock delistings.
Prescience Point manages private funds on behalf of clients and principals and takes positions both long and short in support of their research. The firm invests across a broad set of equities that they believe have abnormally large disparities between what their underlying businesses are intrinsically worth and what their securities sell for.
The firm was founded by investor Eiad Asbahi in 2009 and is headquartered in Baton Rouge, LA. Prescience Point Capital Management is a registered investment advisor with the State of Louisiana a member of the Financial Industry Regulatory Authority, CRD number 152721. For updates follow Prescience Point on Twitter @PresciencePoint
Disclaimer
THIS RELEASE EXPRESSES SOLELY PRESCIENCE POINT CAPITAL MANAGEMENT'S OPINIONS. Use Prescience Point's research opinions at your own risk. This is not investment advice nor should it be construed as such. You should do your own research and due diligence before making any investment decisions with respect to the securities covered herein. Forward-looking statement and projections are inherently susceptible to uncertainty and involve many risks (known and unknown) that could cause actual results to differ materially from expected results. You should assume we have a short interest in Enphase Energy stock and therefore stand to realize significant gains in the event that the price of such instrument declines. Please refer to our full disclaimer located on the last page of our research report (linked herein).
SOURCE Prescience Point Capital Management
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