2CRSi Loses Over 40% in Stock Value, Requests Trading Suspension Following Short Seller Report
2CRSi's shares fell more than 40% on Thursday, June 18, before the Strasbourg-based high-performance server manufacturer requested the suspension of its trading on Euronext. The trigger for this was the release of a report by Grizzly Research, a short seller, which the company strongly disputes.
A Drop of Over 40% Followed by a Suspension Request
On Thursday, June 18, 2CRSi's shares dropped more than 40% during the session before the company requested Euronext to suspend its trading. According to the company, this request aims to prepare a documented response to the allegations and to ensure complete market information. 2CRSi strongly contests the report that led to the decline. This movement comes after the stock had seen significant gains in recent months, driven by investor interest in infrastructure related to artificial intelligence.
The Allegations by Grizzly Research
The report, published on June 18 by the short seller Grizzly Research, focuses its criticism on 2CRSi's growth in the United States. According to the document, a significant portion of the American revenue relies on undisclosed related-party transactions. Grizzly Research particularly criticizes a $610 million contract announced with an unidentified client, as well as the role of an intermediary, Joseph Church, who is linked to several entities mentioned in the group's U.S. announcements, including NewYork GreenCloud. According to the short seller, this company was created on the same day as the contract announcement and does not have the operational history publicly presented. These elements are accusations made by Grizzly Research and are not established facts at this stage.
2CRSi's Response and Portzamparc's Reservations
2CRSi has announced it is preparing a detailed response and indicated that its board of directors has involved the audit and risk committee. The company reserves the right to take actions to defend its rights, reputation, and the interests of its shareholders. Meanwhile, Portzamparc believes the report is structured enough to warrant a clear response, particularly regarding the relationship with NewYork GreenCloud and the financial standing of Atlas Cloud. However, it considers the conclusion that 2CRSi might have fabricated almost all of its revenues as excessive, noting that the contribution of NewYork GreenCloud to past revenues would be negligible. For investors, the case becomes a test of credibility: it will focus as much on the actual nature of the contracts and commercial counterparts of the group as on the trust placed in its financial communication.
