Hacktivist group Anonymous weighs in on Gotham’s short selling note on AAC

A faction of the global hacktivist collective Anonymous has stepped into a short-selling call on a Hong Kong-listed electronic components maker, in an unusual bit of rivalry amid a capital market that’s come into the cross hairs of short sellers’ sights.

At stake is whether AAC Technologies, a supplier of speakers, microphones and other parts to electronic companies, engaged in dubious accounting practices and misled its client Apple Inc to evade the American company’s labour standards.

Gotham City Research, a short seller based in New York, said last month that AAC Technologies used more than 20 undisclosed related parties to overstate its profits and evade Apple’s labour standards. While the company denied the charge as “inaccurate and misleading,” a faction of the global hacktivist collective Anonymous has also chimed in.

“The entirety of Gotham’s short thesis alleging undisclosed related parties appears not only false, but it doesn’t even make sense from a valuation perspective,” according to a 50-page report by Anonymous Analytics. “Gotham had made a series of unfortunate mistakes in sourcing evidence and properly translating Chinese entity names to their English equivalent.”

Anonymous Analytics labelled AAC as a strong buy with target price of HK$111.

“I was shocked to learn about the document published by Anonymous. I am unfamiliar with the details of such document,” Benjamin Pan, Chief Executive Officer of AAC said after the release of the report, adding that he denied that Gotham City’s allegation had prompted business partners to reconsider or investigate the company’s work environment.