What happened 

Shares of Enphase Energy (ENPH -1.75%) fell as much as 16.8% in trading Wednesday after a short-seller's report was released. As of 11:45 a.m. EDT, the stock was down 12.8%. 

So what

A report from Prescience Point Capital Management accused Enphase Energy of a host of things, including revenue growth being a "sham" and producing "fabricated" revenue. These are explosive allegations and, for today, investors are taking them seriously.

Home with solar panels and cloudy skies in the background.

Image source: Getty Images.

It's not unusual for short-sellers to go after companies they think are overvalued, but the allegations here go much deeper than that. No doubt management will need to respond to assure investors that it's still a solid solar energy stock

Now what

I am not going to jump on a short-seller's report one way or the other, but it's important to keep in mind that Prescience Point had an incentive to push shares lower. Now, it's up to Enphase Energy's management to refute these claims and bring back some investor confidence. 

I wouldn't panic-sell shares today, but this is certainly a development for investors to take note of. If any subsequent investigations find wrongdoing, it would be terrible for the stock. But the risks don't appear to be on the level of some Chinese stocks over the past decade whose SEC filings weren't audited by reputable accounting firms and didn't provide complete information about their businesses. Enphase Energy is more established and audited as a U.S. company is expected to be. That said, keep an eye out for developments regarding these accusations.