John Fichthorn, co-founder and portfolio manager of Dialectic Capital, has a short position in the stock, based upon research presented by J Capital Research. A separate report from Mithra Forensic Research drew similar a conclusion, Fichthorn said.
Citing discrepancies in the company's accounting, Fichthorn said it's not completely unheard of for a Chinese company to misrepresent its results in the U.S. If the numbers are indeed false, it makes Vipshop a difficult short, because it can basically release whatever results it wants, he said.
Its financial filings in China are vastly different than the filings with the Securities and Exchange Commission, leading to concerns that the company's results are not accurate. Situations like this need to be addressed, Fichthorn said.
However, not everyone was lining up against Vipshop, as respected Wall Street vet Gene Munster came to the company's defense. Munster, a senior analyst at Piper Jaffray, says it's not uncommon for a Chinese company to have its filings with authorities in China and with the SEC not match up.
"I hate to say it, but it's next to impossible [to find a fraudulent company] unless you're on the inside," Munster added.
The fact that the discrepancies are so wide actually makes the situation less concerning, he explained, saying that it's easy for accountants to misread or flat out miss certain critical data points when going through the two filings.