Short seller accuses XMax of faking AI business

Wolfpack Research alleged fake order history and AI pivot.

Short seller Wolfpack Research has penned a scathing report alleging that US furniture maker XMax has fabricated orders and misled investors over a pivot into AI.

In a Thursday report, Wolfpack accused XMax of faking $4.6 million in stone slab purchase orders from five suppliers in Malaysia in order to avoid a NASDAQ delisting in October 2024. According to the short seller, whose investigators reportedly visited the listed addresses of the suppliers, four of the locations were residential properties while one was a preschool.

Wolfpack argued that XMax proceeded to erase these non-existent assets off its balance sheet by making up $8 million sale to a customer in Hong Kong.

In a separate allegation, Wolfpack argued that the company's recent announcements of a $4.8 million cloud service agreement with a subsidiary of AI infrastructure company SuperX AI Technology was also a lie, explaining that the supposed partner has not acknowledged the material deal.

The short seller also expressed concerns over the legitimacy of XMax's $25 million investments in SpaceX and xAI via newly formed Cayman Islands entities.

XMax has not commented on the short report.

XMax's stock fell 3.5% following the report's publication, but has since bounced back and closed at $8.39 on Friday.

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