What happened 

Shares of inverter manufacturer Enphase Energy (NASDAQ:ENPH) fell 18.3% in June, according to data from S&P Global Market Intelligence after a short-seller report questioned the company's financials. 

So what 

In mid-June, Prescience Point Capital Management released a report that called Enphase Energy's financials into question and sent shares sharply lower. In the most damning part of the report, Prescience Point says that "we believe that at least 39%, or $205.3 million, of ENPH's reported U.S. revenue is fabricated." That's a huge claim, even for a short seller. I'll point out, though, that shares have now recovered most of the losses from the initial sell-off the report caused.

Roof with solar panels.

Image source: Getty Images.

Enphase's management didn't acknowledge the report and didn't give answers to any of the accusations. But the next earnings report and quarterly SEC filing will be under increased scrutiny because of the potential problems Prescience Point raised. 

Now what 

I wouldn't sell a stock like Enphase Energy only because of this report. But it's worth at least keeping in mind the questions brought up, and management should at least address the concerns during the next earnings call. This growth stock does have a lot going for it, with the residential solar industry growing and module-level electronics being mandated in more areas. With the bullish and bearish cases being laid out, I for one will be watching the company's next earnings report very closely for answers. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.