Why Ubiquiti Networks, Inc. Stock Plunged Today
Shares of Ubiquiti Networks Inc. (NASDAQ: UBNT) fell as much as 13% early Monday, then settled to close down 7.9%, after short-selling firm Citron Research suggested the networking hardware specialist could be a "total fraud."
More specifically, Citron notes that Ubiquiti's operating metrics -- including its trailing 12-month operating margin of 34% and average net margin of 28% over the past three years -- are unusually high for its industry. But rather than viewing this as a bullish sign, Citron believes Ubiquiti's exceptional results are a red flag.
"Either [Ubiquiti's] Robert Pera is the best CEO in networking equipment," the report insists, "or Ubiquiti is committing FRAUD."
Source: Fool.com