C3.ai short (AI), mcap=$2480m

AI short pitch:
– Hyped-up consulting firm disguised as an “Enterprise AI Platform”.
– Stock is up 125% YTD following a vague/nonsensical AI-related press release.
– AI has a hugely unprofitable generic business with promotional management who have a history of pumping the stock.
– Business has also been performing poorly over the last two quarters with negative sequential QoQ revenue growth.
– Management guides for even larger operating losses next quarter.
– ~30 VP+ executives have left the company since 2021.

AI valuation:
– Trades at 6-7x NTM revenue with no/negative growth down the line.
– Expected to trade at 2-3x revenue in a bullish scenario, 0 in a bearish scenario.

Exp. gain: 50-100%

Full write-up (free guest account required):

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