Wolfpack Research Alleges XMAX Runs 'Malaysian Hustle'

Shares of XMAX Inc (NASDAQ:XMAX) are trading lower Thursday morning after short seller Wolfpack Research published a scathing report accusing the company of operating a “Malaysian hustle.” Here’s what investors need to know.

• XMAX shares are experiencing downward pressure. Why is XMAX stock retreating?

Fake Purchase Orders Discovered By Wolfpack Investigators

The report alleges the furniture company is promoting a fabricated pivot into artificial intelligence to justify massive shareholder dilution. Benzinga has reached out to XMAX for comment on the allegations.

According to the report, XMAX narrowly avoided a NASDAQ delisting in October 2024 by allegedly faking $4.6 million in stone slab purchase orders from five Malaysian suppliers. Wolfpack investigators visited the listed addresses of these suppliers and discovered that one location was actually a preschool, while others were residential properties, the report states.

The firm believes XMAX then washed these non-existent assets off its balance sheet by recording a fictitious $8 million sale to a mystery customer in Hong Kong.

AI Pivot Raises Financial Red Flags

Furthermore, Wolfpack Research asserts that XMAX’s recent foray into the AI sector is baseless. While XMAX announced a $4.8 million cloud service agreement with a subsidiary of SUPX, the supposed partner has not acknowledged the material deal. The short seller also raised red flags over XMAX’s opaque $25 million investments into SpaceX and xAI via newly formed Cayman Islands entities.

Ultimately, Wolfpack warns that retail investors face potentially endless dilution. The company recently filed for a $1 billion shelf offering and has reportedly issued millions of shares to undisclosed foreign entities at staggering discounts of up to 50%.

XMAX Shares Drop Thursday Morning

XMAX Price Action: XMax shares traded lower on the report before bouncing back. The stock was up 2.33% at $8.34 at the time of publication on Thursday, according to Benzinga Pro data.

Image: Shutterstock