GigaCloud's E-Commerce Success Story Is Fact or Fiction? Culper Research's Short Report Raises Doubts

Culper Research is short on GigaCloud Technology Inc GCT, noting the company presents itself as a top-tier e-commerce logistics company, boasting impressive achievements such as tripling Gross Merchandise Value to $607.5 million in the last three years and generating $155 million in service revenues. 

They attribute their success to their AI technology, which has made them consistently profitable and more efficient than their competitors in the fiercely competitive e-commerce and logistics sector.

Benzinga has reached out to the company for comments on the short-seller report.

Culper highlights the following flaws in the above narrative - GigaCloud's assertion of running 14 U.S. warehouses with only 73 employees suggests an extraordinarily low workforce of approximately five employees per warehouse. 

This efficiency appears highly improbable given the vast size of these warehouses, totaling over 3.7 million square feet and purportedly handling hundreds of millions of dollars worth of furniture. 

In comparison, typical warehousing and fulfillment operations employ hundreds, if not thousands, of workers at each warehouse.

Furthermore, GigaCloud's claims of being 10 to 100 times more efficient than industry giants like Amazon.com Inc AMZN, Walmart Inc WMT, Wayfair Inc W, and Ashley Furniture raise skepticism. 

The company has posted only one job opening on its careers page, a stark contrast to its peers who continually hire for numerous positions. 

GigaCloud's marketing materials rely on manipulated stock photos to present itself as a thriving and efficient enterprise. 

Onsite visits to the company's warehouses in September painted a starkly contrasting picture, with remarkably minimal activity.

GigaCloud asserts that its last-mile delivery segment has generated over $80 million in revenue over the last 12 months. 

However, according to the Department of Transportation, the logistics subsidiary is registered with just five vehicles. 

When contacted, a GigaCloud representative stated that the company exclusively uses its vehicles for deliveries. 

Former employees described GigaCloud's last-mile operation as notably inefficient, in contrast to the company's efficiency claims.

Price Action: GCT shares are down 23.9% at $7.21 on the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.