Reacting to the allegations put forth by short seller Fuzzy Panda Research, DocGo (NASDAQ:DCGO) issued a firm and unequivocal dismissal of the report.
The healthcare services provider witnessed a sharp decline in its stock price, with shares plunging by 38% in response to the accusations made by Fuzzy Panda Research. The report implicated the company in purportedly unethical billing practices and the alleged termination of whistleblowers, among other charges.
Following the release of Fuzzy Panda Research’s report, DCGO experienced a 5.4% surge in its stock value during extended trading.
“We are short DocGo because all the red flags indicate that this ambulance business is about to crash,” declared Fuzzy Panda in its report.
The report drew attention to DocGo’s substantial one-year, no-bid contract of $432 million with New York City, suggesting that the arrangement “seems to mostly be a one-time low margin revenue bump with ~90% of the revenue set to go away in May 2024.”
Contrary to the allegations, DocGo refuted the claims, stating, “The ‘report’ incorrectly states that DocGo’s revenue is going to dramatically decline in 2024 due to the expiration of certain contracts with the City of New York when, in fact, DocGo is projecting an increase in revenue for fiscal year 2024.”
The company reasserted its 2023 revenue guidance in the range of $615 million to $625 million and also expressed expectations for the revenue in 2024 to exceed $700 million.