Knightscope Inc (NASDAQ:KSCP) shares are trading lower Monday on the heels of a short report from Capybara Research.
What Happened: Capybara Research issued a short report on Knightscope warning shareholders of “extensive dilution” ahead.
The short seller believes Knightscope needs to dilute stock in order to raise capital because of its negative cash position. The firm noted that the company is no longer subject to the Baby Shelf Rule and is now able to utilize its $100 million shelf to its full capacity.
Even if the company doesn’t further dilute shareholders, Capybara Research believes shares are overvalued and set for a pullback given the stock’s recent surge. Shares are up nearly 200% over the last month and more than 80% over the last week.
Capybara Research also called Knightscope’s security robot innovations “laughable” and compared them to “rejected Star Wars characters.”
“The company parades itself as a solution for surveillance, but a closer look reveals a company that is more smoke and mirrors than actual substance,” the short seller said.
Capybara Research has a price target of 50 cents on Knightscope shares.
Benzinga reached out to Knighscope for comment on the short report. The company responded and said, “We look forward to investors joining our 2023 Annual Shareholder meeting this Thursday.”
Knightscope will hold its annual meeting of stockholders after the market close on Thursday at 4 p.m. ET.
See Also: Hims & Hers Hit With Short Seller Wrecking Ball: Spruce Point Cites ‘No Cost Advantage’, Legal Concerns
KSCP Price Action: Knightscope shares were down 27.3% at $1.56 at the time of publication, according to Benzinga Pro.
Photo: courtesy of Knightscope.
