Supplements firm backed by Mark Zuckerberg ‘pure hype’: short seller

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A dietary dietary supplements company backed by an funding firm tied to Mark Zuckerberg claims to promote a revolutionary anti-aging capsule — however a short seller claims the company is “pure hype.”

ChromaDex, a Los Angeles-based marketer that claims it’s “dedicated to healthy aging,” bought shares in a 2017 deal that made Zuckerberg’s funding firm Iconiq its second-largest shareholder with a 1.7-million-share stake that was then valued at $7 million.

At the time, ChromaDex’s largest investor was Li Ka-shing, a Chinese billionaire and early Facebook investor who swears by the company’s flagship product, Tru Niagen. Ka-shing invested $25 million.

Two weeks in the past, ChromaDex introduced it might promote Tru Niagen at hundreds of Walmart places. In report slated to be launched Thursday that was completely obtained by The Post, the short-selling firm J Capital Research predicted the seemingly “promising” Walmart information will turn into the most recent instance of a company that the report claims hypes partnerships after which fails to ship.

“We have come to the conclusion that the company is pure hype, dished up by an Oceans 11 of stock promoters,” J Capital analyst Anne Stevenson-Yang wrote within the report.

Chinese billionaire Li Ka-shing is one other one of many prime investers in ChromaDex.
REUTERS/Tyrone Siu/Files

J Capital, which has positioned a short wager in opposition to ChromaDex shares that can repay in the event that they fall, in 2020 alleged fraud at corporations together with Luckin Coffee and WireCard. Last summer time, Luckin was delisted from Nasdaq after it admitted its working chief fabricated gross sales numbers. WireCard, in the meantime, filed for insolvency, admitting that greater than $2 billion on its stability sheet might have by no means existed.

Members of ChromaDex’s administration have been the goal of greater than a dozen lawsuits by the Securities and Exchange Commission which have accused them of manipulating the stock costs of micro-cap corporations with names like Opko Health, Cocrystal Pharma and Mabvax Therapeutics, in line with J Capital’s report.

“Why would you trust them with CDXC?” the report added, referring to ChromaDex’s stock-ticker image.

ChromaDex has beforehand introduced partnerships with massive names like GNC and Nestle. But researchers at J Capital say they have been unable to seek out Tru Niagen in a single GNC retailer and that the Nestle partnership generated only a few hundred thousand {dollars}.

CoA analysis scientist working in a ChromaDex laboratory in Longmont, Colorado.
Photo by Lewis Geyer/Digital First Media/Boulder Daily Camera by way of Getty Images

“CDXC promotes its single product, a health supplement, with iterative press releases that boost share price long enough for insider sales before the vaunted advantages contained in those press releases quietly disappear,” the report claims.

“There is no fraud and no effort to pump the stock,” a lawyer for ChromaDex informed The Post in an announcement. “Those allegations are categorically false.”

Reps for the funding firm Iconiq didn’t reply to requests for remark. In this primary quarter, the firm bought roughly 410,000 shares for $12.1 million — bagging a 300-percent return on its funding, in line with securities filings. Iconiq nonetheless holds 1.9 % of ChromaDex.

The sale comes after ChromaDex obtained a warning letter from the Food and Drug Administration that known as out false promoting that its product helped deal with coronavirus, in line with J Capital.

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