Tingo Group (NASDAQ:TIO) shares crashed almost 57% Tuesday after activist short-selling firm Hindenburg Research labeled the company "an exceptionally obvious scam."
Hindenburg alleges Tingo's financials are "completely fabricated," adding that they have "identified major red flags" with CEO "Dozy" Mmobuosi's background.
They add that Mmobuosi appears to have fabricated certain claims, including that he developed the first mobile payment app in Nigeria and that he claimed received a PhD from a Malaysian university.
In addition, Hindenburg states Tingo's food division is seven months old but claimed to generate $577.2 million in revenue last quarter, representing 68% of total reported revenue.
"If accurate, its claimed 24.8% operating margins would exceed those of every major comparable food company," said Hindenburg. "Yet, Tingo has no food processing facility of its own."
In the wide-ranging report, the short-seller declares that they think "Tingo is a brazen fraud."