Tingo Group (NASDAQ: TIO) stock is down 48% yesterday, another 5% postmarket, on the back of a short selling report from Hindenberg. It's not possible to be entirely categorical of course but there are independent sources of information leading to the idea that Hindenberg might well be correct here. Further, if they're even close to being correct - that is, it's not necessary for each allegation to be wholly and exactly true, just for the general analysis to be generally right - then there's no value in Tingo Group at all. Certainly not any value that will survive the likely upcoming lawsuits.
That might seem harsh but the Hindenberg claim is that there's really nothing there at all. “We are short Tingo Group Inc (NASDAQ:TIO) because we believe the company is an exceptionally obvious scam with completely fabricated financials.” Yes, such things do happen. The Hindenberg claims might seem excessive, but that's the list of them there that can be read through. What we all desire is some independent verification of any of them. Which the Financial Times provides: “The Financial Times recently visited Tingo's sparsely staffed headquarters in Lagos, where the company's Nigeria CEO and his chief technology officer struggled to answer basic questions, including on the identity of their banking partner.
After a press release from Tingo late last month announcing a “multi-billion-dollar pipeline” of commodities exports going through Dubai, the FT visited its Dubai branch, located in the Jumeirah Lake Towers, which houses the Dubai Multi Commodities Centre free zone. The office was empty. One neighbour said a few people occasionally came into the premises, but had not been seen for several days.”
Now, such things can only be a matter of opinion, obviously, none of us are privy to the detailed information to either prove or refute. But our opinion is that this has been found out - there's no value here.
Tingo Group share price from NASDAQ
The big question becomes, well, if this is all a fraud then why? Something as brazen as this would be found out at audit time soon enough. OK, it seems to have passed one audit but complete fabrication - which is the allegation here - won't continue to pass the audit process. So the game would come to an end soon enough. So why go through the process in the first place? What benefit could there be?
Remember that TIO was a SPAC merger with the cash rich MICT. There was about $105 million in that shell company - the one TIO merged with back in December. One reading of this game - again, opinion only - is that the whole scam was to gain access to that cashpile. What happens subsequently doesn't particularly matter to the success of the grift. That the wheels were always going to come off doesn't matter if the goal has already been achieved.
As we say, we are placing our opinion out there rather than being categorical. But our opinion is that Hindenberg is right and this is headed to zero. Don't even think about picking up stock on the cheap - there's no price that is not too expensive.