What happened

Shares of GigaCloud Technology (GCT -2.78%) were up 13.4% as of 12:30 p.m. ET Friday after the company issued a press release responding to a short-seller's report.

So what

For perspective, GigaCloud stock plummeted nearly 19% yesterday after short-selling firm Culper Research published a critical report claiming -- among other things -- that the Chinese B2B e-commerce specialist has not only misled investors regarding the size of its operations in the United States, but has also overstated the extent of its efforts to leverage artificial intelligence as a competitive advantage in its niche.

"We are short GigaCloud Technology [...] because we believe -- in a playbook reminiscent of the early 2010s 'China Hustle' era -- that the Company's business is a fraction of what it has claimed," Culper's report explained.

Shares of GigaCloud rebounded today, however, after the company issued a press release insisting the "report lacks merit and contains numerous, defamatory, selective, inaccurate, incomplete, and misleading statements and speculations."

GigaCloud elaborated:

The report demonstrates a fundamental lack of understanding of the Company's business and financial condition. The Company is reviewing the claims and considering appropriate courses of action to protect the interests of all of its shareholders. [...] Investors are cautioned that the claims come from a short seller. Therefore, investors shall exercise caution when considering these claims.

Now what

To be sure, most investors would often do well to take claims brought by short sellers with a grain of salt, considering the firms stand to benefit when shares of their chosen targets decline. But t's also important to note that GigaCloud did not specifically refute any of the claims made by Culper Research in its 27-page report.

But GigaCloud also noted it will make "additional disclosures in due course," promising to communicate with shareholders and the public in a timely fashion.

In the meantime -- while shareholders are rightly encouraged that GigaCloud has pledged a more comprehensive response is on the way -- it's no surprise that even after today's bounce, shares are still trading lower than before the report was published.