By Sam Boughedda
Kerrisdale Capital revealed Monday that it is short C3.ai (NYSE:AI), saying in a tweet that the company is a "no-growth, cash-burning industry flop."
Despite the short report, C3.ai shares are up just over 3% so far in today's session.
The investment research firm argues that C3.ai has "from the ashes of its busted IPO based on the misconception that its self-proclaimed 'AI leadership' somehow positions it to benefit from Silicon Valley's current tech theme du jour: generative AI as represented by media obsession ChatGPT."
However, they believe the "speculative flames won't burn bright much longer" due to the realities of the company's poor customer traction, failing sales partnerships, and financial pressures.
The firm also claims it isn't the first time C3.ai has tried to ride the wave of a hot investment theme.
"The company was originally founded as C3 Energy to develop analytics solutions for public utilities preparing for the emergence of cap-and-trade and smart grids," they explained, adding that they pivoted in 2016, renaming the company C3 IoT before moving on to C3.ai.
"Generative AI will do nothing to change the business or financial trajectory of C3 any time soon, yet C3 faces numerous, more serious near-term challenges," argues Kerrisdale. "We find little about C3.ai intelligent, but plenty artificial."