Gabriele Grego of Quintessential Capital Management used the inaugural Contrarian Investor Virtual Conference to announce his short of Akazoo (NASDAQ:SONG).
“We believe Akazoo is a scheme orchestrated by management to profit while egregiously deceiving investors,” Grego said during the presentation. “We see signs of very suspicious accounting manipulation,” including cash inconsistencies and “a total lack of income taxes.”
Akazoo shares sold off immediately after publication of Grego’s report. After closing the previous session at $2.53, SONG dropped to $2.22. A series of law firms quickly lined up to launch lawsuits against the company.
A week later the stock was trading at $1.14,. The company fired its CEO and Nasdaq suspended trading in its shares. On May 21, an Akazoo special committee of independent directors announced that management and associates “participated in sophisticated multi-year fraud.”
Nasdaq delisted the shares on May 27.
Akazoo has since become a poster child for SPAC misconduct, with the Financial Times devoting an article to Grego and his report (see below).
Shameless Plug Alert: The next iteration of the Contrarian Investor Virtual Conference, our fifth, takes place Dec. 10. Get tickets here.