Kandi’s stock tumbles after short seller Hindenburg takes aim at China-based EV maker

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Shares of Kandi Technologies Group Inc. tumbled 17.2% in active morning trading Monday, after short seller Hindenburg Research took aim at the China-based electric vehicle maker, alleging a “brazen scheme” to “falsify revenue using fake sales to undisclosed affiliates. Trading volume spiked to over 20.1 million shares, already more than the full-day average of about 15.0 million shares. The stock has now plunged 24.4% since closing at a 6-year high of $14.93 a week ago. Hindenburg said it’s investigation into the company’s factories and customer locations found that most of Kandi’s sales to its top customers over the last 12 months (LTM) have been to related parties. The largest customer representing 55% of LTM sales shares a phone number with a Kandi subsidiary and an executive with Kandi, Hindenburg said. The report also said that on a visit to the customer’s location, a sign indicating it was a Kandi company was found. Kandi did not immediately respond to a MarketWatch request for comment. Kandi’s stock has rallied 80.2% month to date, while the iShares MSCI China ETF has edged up 3.0% and the S&P 500 has gained 10.3%.
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