Kerrisdale short IonQ, says investors ‘seduced by claimed history’

In a research note, Kerrisdale Capital says it is short IonQ (IONQ). The stock has tripled in recent months as retail investors “piled into an industry that has long been plagued by overpromises and hype,” Kerrisdale says, adding that IonQ’s valuation “defies both logic and the warnings of former IonQ employees, who highlighted monumental scaling challenges that will derail the company’s ambitious plans.” The firm thinks IonQ is “far” from being on the verge of a new era of commercial success with its “limited, error-prone systems” says investors have been “seduced” by IonQ’s claimed “history of delivering on technical and commercial milestones” are fixated on relatively immaterial past achievements, while “ignoring the existential challenge all early-stage computing companies face: scalability.” A “cash-burning, highly promotional company in a hot sector valued at absurd revenue multiples, with retail investors piling in and ignoring critical scaling challenge – even as the CEO unloads $37M worth of stock – are hallmarks of a disaster in the making.”