Nano-X Imaging Ltd shares tumbled in pre-market trading Tuesday after noted short seller Carson Block indicated he is betting against the Israel-based start-up medical imaging group.
Block, who runs Muddy Waters Research, said the group had "no product to sell other than its stock" and accused it of 'faking' a demonstration video that highlight the innovation of its Nanox Arc, a portable bed the company says is intended to make the patient feel more at ease during radiology and lower costs for hospitals using its semiconductor-based technology.
Block also cited comparisons to electric truck maker Nikola Corp. (NKLA) - Get Report, which lost billions in market value -- as well as its executive chairman and founder Trevor Milton -- following allegations of fraud from Hindenburg Research that triggered an investigation from the U.S. Securities and Exchange Commission.
"If Nano-X claims are achievable, it seemingly will come as a shock to most of the radiology profession," Block wrote. "We interviewed five radiologists who were familiar with Nano-X’s claims. Not a single one expressed credulity of Nano-X."
"Four of the radiologists – without any prompting – compared Nano-X to Theranos," Block added. "The ARC appears to be little more than a futuristic movie prop. In fact, an Israeli company that designed a pickup truck used in the movie Jurassic World claims credit for its design."
Nano-X was not immediately available for comment when contacted Tuesday by TheStreet.
Nano-X shares were marked 12.5% lower in early trading to change hands at $25.27 each, having traded as high as $64 each earlier this month when it listed on the Nasdaq. Tuesday's move would trim the stock's six-month gain to around 10%.