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- Camber Energy stock lost more than half its value Tuesday following a short-seller report.
- Investment firm Kerrisdale Capital claimed the company would "once again" be a penny stock.
- The Houston-based oil-and-gas company became a meme stock last month.
- See more stories on Insider's business page.
Shares of newly minted meme stock Camber Energy lost more than half their value Tuesday after an investment firm released a short-seller report that claimed the energy company was "in the middle of a death spiral."
"This one has something for everyone: death-spiral financing, a fake CFO, delinquent filings, fired auditors 3 wks ago, insolvent energy assets & the saddest family of entrepreneurs in the cleantech vaporware space," New York-based Kerrisdale Capital wrote in a tweet about its report.
A representative from Camber Energy did not immediately respond to Insider's request for comment. Shares fell as much as 63% to $1.11 at 12:27 p.m. in New York.
Data from Fintel.io shows short interest in Camber Energy stock jumped to 24.4 million shares from 6.1 million shares in September, giving the company a 23.5% short interest as percent of float. That same month, retail traders, known for banding together to squeeze short sellers, helped drive a more than 600% rally in the Houston-based oil and gas company.
In its short-seller report, Kerrisdale claimed the most "fascinating" part of the company's problems is its share dilution, saying the market is "badly mistaken about Camber's share count and ignorant of its terrifying capital structure." Kerrisdale estimated the company's fully diluted market capitalization is $900 million.
"Camber isn't worth $900 million," Kerrisdale said. "If it looks like a penny stock, and it acts like a penny stock, it is a penny stock. Camber has been a penny stock before - no more than a month ago, in fact - and we expect that it will be once again."
Following the short-seller report, a well-known retail trader known on Twitter as "Tray's Trades," called Kerrisdale's move a "pump and dump." The stock trended among retail traders on Twitch on Tuesday, data from TopStonks.com showed.
According to its website, Camber Energy, through its majority-owned subsidiary Viking Energy Group, owns a working interest in more than 145 oil and gas fields across Texas, Louisiana and Mississippi.