C3.ai tells Bloomberg Kerrisdale making ‘transparent attempt’ to hurt stock

Shares of C3.ai have continued lower throughout the session after short-selling research firm Kerridale Capital disclosed a letter sent by the firm to the company’s auditor and the SEC in which Kerridale alleges "serious accounting and disclosure issues." Kerridale, which previously said in a report published on March 6 that it is short shares of C3.ai, stated in part in its letter that it was "writing to bring to your attention serious accounting and disclosure issues at your client C3.ai, Inc., a publicly listed technology company based in Redwood City, CA. I believe these allegations deserve the immediate attention of Deloitte & Touche LLP, as well as the Securities and Exchange Commission." The firm added: "In our opinion, C3.ai has utilized highly aggressive accounting to inflate its income statement metrics in order to meet sell-side analyst estimates for revenue and certain profit metrics, and to conceal significant deterioration in its underlying operations." In a statement to Bloomberg, C3.ai called the letter a "highly creative and transparent attempt" to diminish the stock price. "Their allegation that C3.ai’s financial disclosures regarding Baker Hughes are somehow incorrect manifests a fundamental misunderstanding of US GAAP [generally accepted accounting principles] accounting practices and principles," a spokesperson told Bloomberg. The company spokesperson added that the accounting disclosures and financial statements referenced in the letter have been reviewed by C3.ai’s independent audit firm. Shares of C3.ai are down $8.87, or 26%, to $25.00 near 2:30 PM.