SoundHound AI (NASDAQ: SOUN) stock fell 3% in the pre-market trading Wednesday after Capybara Research released a short report targeting the company.
Capybara Research has disclosed its short position in SoundHound AI shares, accusing the company of disseminating falsehoods to investors. This revelation marks the second consecutive short report on SOUN within weeks, with Capybara previously slamming the company for exploiting the AI craze to bolster its profits on February 27.
The latest report from Capybara alleges that SoundHound has been misleading investors regarding the capabilities of its AI technology. According to Capybara, SoundHound’s AI product, Houndify, falls short of industry standards and relies on basic speech recognition technology integrated into manually programmed knowledge graphs. Furthermore, Capybara claims that Houndify’s functionality is limited to a narrow range of domains, such as weather and sports scores.
Capybara Research said,
“SoundHound pitches their product as world-class ‘AI,’ on par with ChatGPT, but this is not the case.”
The firm alleges that SoundHound’s products often yield inaccurate results and that its “speech recognition tech is a commodity service,” facing stiff competition from industry giants like Amazon, Google, Microsoft, Apple, Cerence, and numerous others.
Moreover, Capybara alleges that SoundHound has been concealing the loss of key customers, including prominent names like Mercedes-Benz, Deutsche Telekom, and Netflix.
Capybara Research concluded its report by saying,
“We believe that SoundHound is worth $1.00 per share or less.”
SoundHound AI (NASDAQ: SOUN) Stock Reaction
SOUN stock dropped 3% in the premarket trading Wednesday after closing the regular trade at $8.33 on Tuesday. The traders had exchanged hands with 99,896,471 (99.89 million) shares compared to the average daily trading volume of 51.82 million.
Edward Cooke is a financial analyst, freelance writer, and editor. He has six years of experience in financial journalism. He has an in-depth understanding of equities markets, tracking major indices and providing real-time analysis on stock price movements, corporate earnings, and market sentiment.
