SharkNinja down after Grizzly Research disclosed short, alleges governance issues

Investing.com - Shares of Sharkninja Inc (NYSE:SN) were down 1.2% at $94 in early trading in Thursday after Short-seller Grizzly Research has disclosed a short position accusing the household appliance maker of poor corporate governance, insider enrichment, and undisclosed related-party transactions.

“Our research findings highlight that SN is engaged in some of the worst practices of old-school China hustle stocks,” Grizzly Research said in a statement.

SharkNinja did not immediately respond to investing.com’s request for comment on the allegations.

Key allegations in the report include the sale of a critical subsidiary, holding rights to storefronts on major e-commerce platforms JD (NASDAQ:JD).com and Alibaba’s Tmall, to an entity controlled by Wang for "nominal consideration."

The report added that the company aggressively increased its debt before going public by over $300 million. At the same time, SharkNinja’s Chairman used its balance sheet for a $600 million payout through special dividends and related-party loans.

Grizzly also flagged a concerning rise in supplier purchases from Joyoung, a China-listed company chaired by Wang, suggesting potential conflicts of interest that could disadvantage public shareholders. Additionally, the report pointed to nepotism, citing the appointment of Wang's 28-year-old son to SharkNinja's board.

The short-seller also highlighted SharkNinja’s premium valuation, noting its price-to-sales ratio of 2.7 and price-to-earnings ratio of 37.9, which it believes overlooks the risks tied to governance and insider dealings.