IonQ, partners respond to scathing short-seller report

By Dan O'Shea posted 09 May 2022

IonQ late last week issued a cool-headed but generic response to a shrill report by short-seller Scorpion Capital earlier in the week that claimed that IonQ is an “academic side hustle,” that quantum computing advances claimed by IonQ are a “hoax,” and that IonQ CEO Peter Chapman “recklessly and compulsively” makes “bogus claims” about the company’s progress.

The IonQ response stated in part that Scorpion Capital’s 183-page report, which which uses even more colorful language and makes many more allegations than those mentioned above, contained “important inaccuracies and mischaracterizations regarding IonQ’s business and progress to date. The report’s author has preemptively disclosed that it stands to profit in the event that the stock price of IonQ declines. IonQ cautions investors to not make decisions based on this report and instead strongly encourages them to consult credible sources, including IonQ’s filings with the U.S. Securities and Exchange Commission, prior to making their investment decisions.”

IonQ’s response did not directly address any of the allegations made in the report. IonQ’s stock price fell sharply after the report went public, closing at $5.92 last Friday after hitting highs above $35 last November. The company went public after a special purpose acquisition company merger, a type of transaction that has fallen out of favor in recent months amid criticism of over-hyped valuations and other issues.

At least one law firm said it was investigating IonQ on the behalf of shareholders as a result of the short-seller report.

Meanwhile, companies who have worked with IonQ rallied to the company’s defense on Twitter. 

“1QBit’s use of $IONQ‘s hardware has been focused on our joint effort with Dow on applications in quantum chemistry, read a multi-post thread by 1QBit. “This work was subjected to a double-blind peer-review process and demonstrated industry-leading results on @IonQ_Inc hardware… After 3 years of collaboration and months of experiments, 1QBit and Dow used $IONQ‘s processor to accurately calculate the electronic structure of the largest molecule yet analyzed using a quantum computer.”

Multiverse also Tweeted support for IonQ, “IonQ’s processor is one of the most powerful quantum machines in the market and we have obtained great results with it…”

IonQ is due to report first quarter earnings on May 16. The company sounded bullish after reporting fourth quarter and full-year 2021 numbers in March, saying at that time that it expected to report at least $1.8 million in revenue for the first quarter.

Dan has covered telecommunications and related topics including semiconductors, sensors, retail systems, digital payments and quantum computing/technology for over 25 years.

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