DocGo plunges after Fuzzy Panda Research shorts the stock

DocGo (DCGO) shares plunged after short seller Fuzzy Panda Research released a report on the company, telling investors it is short the stock as its problems go even deeper than the market realizes.

DCGO, which is a healthcare services firm that went public via a SPAC with Motion Acquisition Corp in November 2021, has seen its shares fall around 33% on Wednesday, trading around the $3.20 mark.

“We are short DocGo because all the red flags indicate that this ambulance business is about to crash,” Fuzzy Panda stated, listing various allegations against the company, including “billing practices that former employees said amounted to Medi-Cal and Medicare Fraud” and lawsuits regarding “multiple allegations of forging signatures on documents.”

Furthermore, Fuzzy Panda claims the company’s one-year, no-bid $432 million contract with New York City to provide services to migrant asylum seekers is “mostly be a one-time low margin revenue bump with ~90% of the revenue set to go away in May.”

“The company is already under government investigation, and we believe the NY Attorney General will soon expand their own investigations to the wider issues we found,” the firm added, alleging fraudulent practices.

The short-selling firm also pointed its finger at the company’s leadership, stating it has a “shady past,” which they claim includes DoJ allegations of fraud.

“Some of the management teams past businesses faced DOJ investigations that resulted in major fines and sent their companies into bankruptcy,” argues Fuzzy Panda. “We think DocGo will face a similar fate.”