GigaCloud Technology Inc Responds to Short-Seller Report
May 23 2024 - 5:00AM
GigaCloud Technology Inc (Nasdaq: GCT) (“GigaCloud” or the
“Company”), a pioneer of global end-to-end B2B technology solutions
for large parcel merchandise, today issued the following statement
in response to the claims made in a report by Grizzly Research LLC,
a short-seller, issued on May 22, 2024.
The short-seller report lacks merit and contains numerous
defamatory, selective, inaccurate, incomplete and misleading
statements, speculation, and innuendo. The report demonstrates a
fundamental lack of understanding of the Company’s business
particularly with respect to the types of buyers who use our
marketplace and the services we provide them.
- Web TrafficThe
first allegation in the short-seller report is that the Company’s
“web traffic does not square with its growth story.” The report
misleadingly cites third-party data search traffic – but
this does not reflect overall visitor traffic to the Company’s
website. Indeed, as explained by the third-party cited in
the short-seller report, the “Domain Overview” and “Organic
Traffic” data provide data regarding search engine
performance.1 This third-party also explains that
“[e]stimates of total website traffic” are found in their “Traffic
Analytics” tool.2 The report omits this data, which shows
significant web traffic measured by visits to the Company’s website
of roughly 130,000 total visits and 11,000 unique visitors during
April 2024, according to this third-party’s estimates.The Company’s
marketplace is a business-to-business (B2B) platform, not a
consumer-direct business. As previously disclosed, buyers in the
Company’s marketplace are typically resellers (rather than end
consumers) and this level of website traffic is fully consistent
with the Company’s disclosures that it had approximately 5,010
active buyers on its marketplace during 2023.In other words, the
Company’s business model is to sell in volume to a smaller number
of customers than if it operated a consumer-direct business. In
focusing only on search activity, the short-seller report
misapprehends the nature of the Company’s business and misstates
the overall traffic to the Company’s marketplace.
- Related Party
TransactionsThe short-seller report claims that the
purported lack of website activity is explained by allegedly
undisclosed transactions with related parties. This claim is false
and misleading for the reasons noted above: GigaCloud’s B2B
marketplace has substantial monthly traffic. There is also no merit
to the claims the short-seller makes about purported related party
transactions. Following similar unsubstantiated allegations made in
September 2023 by another short-seller, the Company carefully
evaluated its customer relationships and has disclosed in its
filings made with the U.S. Securities and Exchange Commission all
related party transactions required by the applicable rules and
accounting standards.There is also no basis in the short-seller’s
unsupported suggestion that sales made through certain entities are
not legitimate. As the Company previously disclosed, buyers in its
marketplace can list products for sale to consumers on their own
stores or other ecommerce websites and GigaCloud will handle
fulfilment directly to their end customer. These transactions
represent legitimate sales that can be validated through the
records of deliveries to end customers and are corroborated by the
substantial expenses the Company has previously reported for
delivery and logistics services.
The balance of the short-seller report consists of malicious
personal attacks and unsupported innuendo. Investors are cautioned
that the claims come from a short-seller who admits on its website
that: (1) its views are “not statements of fact,” (2) it makes “no
representation” as to the accuracy of information in its report,
and (3) it “will realize significant gains in the event the prices
of [the Company’s stock] declines.” Investors are encouraged to
review materials filed by the Company with the SEC and available on
the Company’s investor relations website.
The Company is continuing to consider the claims in the
short-seller report and reserves all rights to take appropriate
measures to defend itself against attempts to manipulate the market
for its stock and to safeguard the interests of its
shareholders.
About GigaCloud Technology IncGigaCloud
Technology Inc is a pioneer of global end-to-end B2B technology
solutions for large parcel merchandise. The Company’s B2B ecommerce
platform, which it refers to as the “GigaCloud Marketplace,”
integrates everything from discovery, payments and logistics tools
into one easy-to-use platform. The Company’s global marketplace
seamlessly connects manufacturers, primarily in Asia, with
resellers, primarily in the U.S., Asia and Europe, to execute
cross-border transactions with confidence, speed and efficiency.
The Company offers a truly comprehensive solution that transports
products from the manufacturer’s warehouse to the end customer’s
doorstep, all at one fixed price. The Company first launched its
marketplace in January 2019 by focusing on the global furniture
market and has since expanded into additional categories such as
home appliances and fitness equipment. For more information, please
visit the Company’s website:
https://investors.gigacloudtech.com/.
Safe Harbor StatementThis press release
contains statements that may constitute “forward-looking
statements” pursuant to the “safe harbor” provisions of the U.S.
Private Securities Litigation Reform Act of 1995. Forward-looking
statements reflect our current view about future events. These
forward-looking statements involve known and unknown risks and
uncertainties and are based on the Company’s current expectations
and projections about future events that the Company believes may
affect its financial condition, results of operations, business
strategy and financial needs. Investors can identify these
forward-looking statements by words or phrases such as “may,”
“will,” “could,” “expect,” “anticipate,” “aim,” “estimate,”
“intend,” “plan,” “believe,” “is/are likely to,” “propose,”
“potential,” “continue” or similar expressions. The Company
undertakes no obligation to update or revise publicly any
forward-looking statements to reflect subsequent occurring events
or circumstances, or changes in its expectations, except as may be
required by law. Although the Company believes that the
expectations expressed in these forward-looking statements are
reasonable, it cannot assure you that such expectations will turn
out to be correct, and the Company cautions investors that actual
results may differ materially from the anticipated results and
encourages investors to review other factors that may affect its
future results in the Company’s annual report and other filings
with the SEC. This press release also contains publicly available
data compiled a third-party not affiliated with the Company. We
have not independently verified this data, are not privy to the
precise methodology by which it was compiled, and have presented it
solely for purpose of comparison to other data made available by
this third-party.
For investor and media inquiries, please
contact:
GigaCloud Technology Inc Investor Relations
Email: ir@gigacloudtech.com
PondelWilkinson, Inc.Laurie Berman (Investors)
– lberman@pondel.comGeorge Medici (Media) – gmedici@pondel.com
A photo accompanying this announcement is available
at:https://www.globenewswire.com/NewsRoom/AttachmentNg/7611ef1b-17fb-4941-ac90-890ecb8a57f0
______________________________
1 https://www.semrush.com/kb/254-domain-overview;
https://www.semrush.com/kb/296-organic-traffic-insights2
https://www.semrush.com/kb/26-traffic-analytics
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