What happened

Investors in Nano-X Imaging Ltd (NNOX 3.34%) are having a rough couple of weeks.

Since soaring 250% after its August IPO, shares of the start-up X-ray machine maker have been pummeled by a series of negative reports from short sellers, beginning with a prediction by Citron Research that Nano-X was heading to $0, and culminating, this morning, in a new negative report from short-seller Muddy Waters.

Nano-X shares, which topped $64 on Sept. 11, got cut more than in half through the close of trading yesterday. Today, Nano-X stock is down another 12.2% through 10:30 a.m. EDT.

Glowing red stock chart arrow trending down

Image source: Getty Images.

What happened

Muddy Waters Research pulled no punches today. In fact, its tone was quite a bit nastier than even what Citron Research used last week, describing Nano-X stock as a "piece of garbage" that is hawking an imaginary product, and "almost certainly [using] somebody else's chest images to try to make its ARC machine look real."

Furthermore, according to the analyst, Muddy Waters has interviewed "five radiologists who were familiar with NNOX's claims" but "not a single one" of them thinks the company is legit. In the analyst's opinion, the company's X-ray machine is not a functioning product, and instead is "little more than a futuristic movie prop."

So what

Of course, there's a simple solution to all of these objections the short-sellers are raising: Nano-X should demonstrate a working product and prove that it is what it says it is. That would probably silence the critics for a while, at least.

Until Nano-X does that, though, I fear the sell-off will continue.