Why Muddy Waters Went Short on Nano-X Imaging Ltd. (NNOX)

Muddy Waters Research is betting against Nano-X Imaging Ltd. (NASDAQ:NNOX), saying that the company has “important similarities” with Nikola. In a research report, the investment firm writes that NNOX has “no product to sell other than its stock.”

NNOX is a medical imaging technology company that has ensured cost-reduced imaging system. Muddy Waters  believes that the company has tried to legitimize itself by using the halo of respectable companies and has used other companies’ names to run its advertisements. For their ARC machine, they have partnered with a “Noble peace-prize nominated” hospital named Hadassah Hospital. But, the investor believes that their partnerships have been greatly misrepresented.


NNOX Imaging has predicted that it has been doing quite well on financial front, but that isn’t very true, according to the report. The company offered options for its 1.2 million shares at $2.21 per share, to the president of SK Telecom. The net worth of the offered options was equal to $32.1 million. This deal was made before the SK telecom happened to invest in Nanox imaging.

“A convicted felon, who crashed an $8 billion market cap dotcom into the ground, was seemingly instrumental in plucking NNOX out of obscurity and bringing its massively exaggerated story to the U.S. NNOX touts distribution partnerships that supposedly amount to $180.8 million in annual commitments. Almost all of the company’s partnerships give reason for skepticism,” according to the report.

Talking specifically about their product of ARC machine, it was the central point of many decisive claims that NNOX had. This machine was believed to have been operating at Hadassah Hospital which, in reality, was not. A number of radiologists were interviewed whose reports were greatly against NNOX. Not even a single radiologist talked in favor of the company.

“We conclude that NNOX has no real product to sell other than its stock,” notes the report.

NNOX shares went public in August, so we don’t have any idea about hedge fund positions in this stock yet. NNOX shares peaked at $66 two and a half weeks ago and currently trade for $24.

Disclosure: No positions. This article is originally published at Insider Monkey.