What happened
Shares of LongFin Corp. (LFIN) soared on Thursday following a crash on Tuesday due to an SEC investigation and the disclosure of weak internal controls. LongFin CEO Venkat Meenavalli made an appearance on CNBC on Wednesday, which could be what's driving up the stock. Shares of LongFin were up 72% at 12:15 p.m. EDT.
So what
On CNBC's Fast Money, Meenavalli said that he's "not going to sell [for] the next three years." The CEO complained about short-selling, saying that he is fighting $1.4 billion in bets against the stock.
Image source: Getty Images.
Meenavalli also claimed that he would write the SEC and FINRA regarding this heavy short-selling. "We got information, we have a special investigation," he said. Speaking about short-sellers: "The guys are going to destroy us. I'm fighting here."
This interview came one day after LongFin disclosed an SEC investigation into its IPO and its acquisition of blockchain company Ziddu.com. The company also disclosed a series of problems with its internal controls, including a lack of qualified personnel who fully understand GAAP reporting requirements.
Now what
LongFin doesn't seem to have much of a real business. It generated $75 million of revenue in 2017, almost entirely from the sale of physical commodities, along with a $26 million net loss. Its entry into the blockchain business with the acquisition of Ziddu.com caused the stock to explode higher late last year. But even after today's rally, shares of LongFin are down about 70% since late March.
