Market reaction and report
Shares of Richtech Robotics (NASDAQ:RR) dropped about 20% on Thursday, pressured by weakness across the broader market and a detailed critique from short-seller Hunterbrook questioning the company's recently publicized relationship with Microsoft. The decline followed a dramatic 40% rally earlier in the week tied to Richtech's announcement of a "close collaboration" with Microsoft via the latter's AI Co-Innovation Labs.
Dispute over the nature of the engagement
Hunterbrook's report asserts that Microsoft characterized the interaction not as a strategic commercial partnership but as a "standard customer engagement" with "no commercial element," directly contradicting how the market interpreted Richtech's disclosure. The short seller also emphasized that Microsoft's AI Co-Innovation Labs provide "one-week long complimentary, personalized development sprints" to customers and partners, suggesting that the engagement may reflect routine technical assistance rather than a substantive commercial alliance.
Timing and subsequent fundraising
Hunterbrook pointed out that the stock surge occurred immediately after the Microsoft-related announcement and that Richtech disclosed a $38 million dilutive financing the following morning. The report raised the possibility that the company’s public statements were timed in a way that influenced the share price ahead of the private placement.
Regulatory filing and capital-raising constraints
The short seller also flagged that Richtech missed its 10-K filing deadline. Hunterbrook contends that the missed filing could curtail the company's ability to raise capital through at-the-market offerings, and that this limitation may have been a factor in the sequence of disclosures and financing actions.
Financial position
Hunterbrook highlighted Richtech's fiscal year 2025 results, reporting revenue of $5.045 million and a net loss of $15.754 million. The reported loss was nearly double the prior year's loss of $8.14 million, a point the short seller used to underscore the company's challenging financial position.
Conflicts disclosed
In its filing, Hunterbrook disclosed that it holds a short position in Richtech stock while maintaining long positions in comparable securities.
The claims and timeline laid out by Hunterbrook helped reverse investor sentiment following the earlier rally tied to the Microsoft announcement. Market participants now face the task of reconciling Richtech’s public statements, the characterization of the Microsoft engagement, and the company's immediate capital-raising needs.