The stock of Chinese electric-vehicle (EV) maker Kandi Technologies (NASDAQ:KNDI) is continuing a drop that began yesterday, with shares down 8% as of 11:35 a.m. EST.
Today's dip is on top of the 28% drop the shares experienced yesterday from Friday's closing price.
The big news yesterday was a scathing report on Kandi from short-seller firm Hindenburg Research. Investors may be familiar with that firm as the one that put electric-truck maker Nikola (NASDAQ:NKLA) in the news and caused founder Trevor Milton to leave the company.
Shares of Kandi were on a roll in November, and management tried to take advantage of that to raise money in two separate stock offerings. The company reached a market capitalization of over $900 million on Nov. 19, a level it hasn't seen since 2014. But a retreat in the overall EV sector, along with the Hindenburg report, has driven the valuation back down by 30% since November highs.
Hindenburg claimed some of the company's reported sales are being faked. It said that more than half of sales over the past year are actually to an entity tied to the company and not to an actual customer.
Today Kandi made an initial response to the allegations, saying it believes the report "contains numerous errors, misstatements of historical facts, inaccurate conclusions, and superfluous opinions." Kandi management said that it plans to release detailed explanations and highlight "key inaccuracies" in the near future.
Investors can study the report and decide for themselves if Hindenburg's short position in the stock may have influenced the allegations. Some investors aren't waiting for the upcoming detailed response from the company.