Everspin stock plunges 11% after Kerrisdale Capital's aggressive short attack
Shares in Everspin Technologies fell sharply on Tuesday after investment firm Kerrisdale Capital revealed a short position against the company. The stock dropped by as much as 11%, despite recent earnings that had beaten market expectations. Kerrisdale argued that the company’s recent rally was not backed by its actual business performance.
Everspin Technologies, which specialises in memory solutions, had seen its market value rise to around $767 million before the report. Trading activity surged ahead of the announcement, with volume exceeding $1 billion in a single session—unusual given no major shifts in the company’s operations.
Kerrisdale set a price target of $14 per share, suggesting a potential 63% drop from pre-report levels. The firm questioned Everspin’s high valuation, noting its stock trades at roughly 10 times estimated 2027 sales and 38 times projected 2027 EBITDA. Its price-to-earnings ratio stands at an extreme 3,273 times. The company’s largest market remains casino gaming and slot machines, rather than high-growth sectors like AI data centres or hyperscalers. While its financial health appears strong—with an Altman Z-score of 35.38 and an 8/10 rating for financial strength—recent insider activity has raised eyebrows. Over the past three months, executives, including the CEO and CFO, sold $3.9 million worth of stock, with no reported insider buying.
The short report triggered a sharp sell-off, wiping out a significant portion of Everspin’s market value in a single day. With Kerrisdale’s bearish outlook now public, investors will likely watch for further reactions in the company’s stock and any response from management.
