Jehoshaphat Research has gone short Universal Display Corp. (OLED) claiming the expiration of its “fundamental patent in Q4 2020 has resulted in a sharp decline in the business”.
In a Tuesday report, the activist short seller alleged that “the company has managed to delay the income statement impact by using increasingly desperate accounting measures.”
“When we adjust OLED’s reported revenues to remove the impact of these accounting games, we can see that this supposedly fast-growing business has been in decline since this fundamental patent expired,” said the activist.
Jehoshaphat claims that the stock is “insanely expensive” and predicts an 80% downside to the “intrinsic value” of the company.
The short seller has also alleged that the audit committee “are suddenly urgent sellers of their stock”, two of whom it claimed “have sold an awfully large percentage of their personal holdings in a short amount of time.”
OLED, which sells chemicals to phone and TV screen manufacturers, was founded in 1994 by Sherwin Seligsohn and has a market capitalization of $6.9 billion.
Earlier this year, the Hong Kong-listed shares of power tools company Techtronic Industries were halted after falling 19% on February 24 amid a short report from Jehoshaphat Research alleging ‘‘manipulative’’ accounting.
Shares in Universal Display were up 1.4% at 10:38 a.m. in New York on Tuesday.