Investing.com -- Shares of Quantum (NASDAQ:QMCO) Computing Inc (NASDAQ: QUBT) tumbled 7% following claims presented by Capybara Research, alleging the company has engaged in issuing misleading press releases to artificially inflate its stock price.
The research report cites interviews with former employees and other sources close to the company, accusing Quantum Computing Inc's CEO of releasing promotional press statements that overstate the company's quantum capabilities and customer engagement. These allegations come in the wake of a lawsuit against the company, where plaintiffs claim that Quantum Computing Inc announced sales deals that were entirely fabricated.
According to the report, for years, Quantum Computing Inc has been implicated in releasing false press releases and signing sham deals with undisclosed related parties to pump their stock. One such instance is the announced letter of intent to acquire Millionways Inc, an AI company with undisclosed connections to Quantum Computing Inc. The report claims that one of Quantum Computing Inc's founders was involved with Millionways and that a $500k payment made to Millionways via an unsecured note is unlikely to be repaid.
Further allegations include a deal with Quad M, an OTC-listed company with a history tied to stock frauds, which also had undisclosed ties to Quantum Computing Inc. The CEO of Quantum Computing Inc was a director at Quad M, and co-founders of Quantum Computing Inc were closely connected to Quad M insiders. A memorandum of understanding signed with Quad M, which projected revenue of $5-10 per employee per month for Quantum Computing Inc, failed to materialize and did not generate any revenue.
These revelations have cast a shadow over Quantum Computing Inc's credibility and have significantly impacted investor sentiment, as reflected in the stock's decline.
The cautious report was released Thursday morning and Quantum Computing hasn't yet to responded to the allegations.
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