Everspin Stock Crashes 11% After Kerrisdale's Scathing Short Report
Shares in Everspin Technologies (MRAM) fell sharply after investment firm Kerrisdale Capital revealed a short position against the company. The stock dropped by as much as 11% in a single day, wiping out recent gains. Kerrisdale’s report questioned the reasons behind Everspin’s recent rally, arguing it had little to do with actual business performance.
The company, which specialises in magnetoresistive RAM (MRAM) memory, had seen its market value rise to around $767 million before the announcement. But Kerrisdale’s analysis suggested investors had been overly optimistic about its ties to AI and memory markets—despite its core business serving a very different sector.
Everspin’s stock had surged in recent months, with trading volumes spiking to over $1 billion in a single session. Kerrisdale claimed this rally was driven more by investor excitement around memory and AI stocks than by the company’s own fundamentals. While Everspin’s most recent earnings did beat expectations—with both revenue and non-GAAP earnings per share coming in above forecasts—Kerrisdale argued the valuation remained stretched.
The firm pointed to Everspin’s high multiples as a red flag. The stock trades at roughly 10 times its estimated 2027 sales and 38 times its projected 2027 EBITDA, with an unusually high P/E ratio of 3,273. Despite a strong Altman Z-score of 35.38—suggesting a low bankruptcy risk—its profitability rank stands at just 3 out of 10. Kerrisdale also highlighted insider activity as a concern. Over the past three months, company executives, including the CEO and CFO, sold a combined $3.9 million worth of stock. No insider purchases were reported during the same period. The firm set a price target of $14 per share, implying a potential 63% drop from Everspin’s pre-report levels. Everspin’s largest market is not AI data centres or hyperscalers, as some investors may assume, but casino gaming and slot machines. Kerrisdale’s report suggested this niche focus further undermined the case for its lofty valuation.
The short position announcement triggered a steep sell-off, pushing Everspin’s share price down by double digits. Kerrisdale’s analysis casts doubt on whether the company’s recent gains were justified by its financial health or market position. With insiders selling shares and valuations at elevated levels, the report raises questions about Everspin’s ability to sustain its current stock price.
