This Short-Seller Had Bet Against Jensen Huang And Nvidia 6 Months Ago. No One Listened

Washington: Jensen Huang had just touched down in Beijing aboard Air Force One. He was on a state trip to China with US President Donald Trump in May, when 31-year-old Christian Lamarco, a little-known stock researcher and trader who runs the short-selling firm Culper Research, published a 40-page expose on Nvidia's business in China. On page 3 of the report, Lamarco tucked in a paragraph about Nvidia leader's ties with Alice Huang, a Chinese woman who worked for Singaporean company Megaspeed, a major business partner in Southeast Asia, warning of their "uncomfortably close relationship"."This is not a bet against AI... We are short Nvidia for one reason: the company has a significant China problem," Lamarco wrote in the report. But almost no one noticed his report at the time, and the next day, Nvidia's stock hit a record high. But six months later, Alice Huang's closeness with the Nvidia boss and the significance of the AI chipmaker's China problem are no longer confined to a short seller's research. After a series of denials, Jensen Huang this week confessed to an extramarital affair with the woman, whom US intelligence has accused of being a Chinese spy.The confession has contributed to a $600 billion selloff of Nvidia's shares this week, now making it the world's second-most valuable company. "Sometimes, people care about what you have to say. Sometimes, they don't. I guess in this case, they cared six months later," Lamarco said in an interview with The Wall Street Journal, as Culper's report went from being ignored to becoming the rare piece of securities analysis to go viral.Talking to The New York Times, he said, "Everyone was just mocking us and now everyone is singing our praises."Who Is Christian LamarcoSon of a pastor, Lamarco grew up in upstate New York. He reportedly developed an interest in investing as a finance major at Grove City College, a small Christian school in Pennsylvania. In 2017, he got a job at a long-short firm in Chicago, where he worked till 2019. From there, he moved to Pittsburgh with a few months of savings and struck out on his own.He initially named his firm Shadyside, after a neighbourhood in Pittsburgh where he was living, but later he renamed it after Culper Ring, which secretly tracked the movements of British forces almost 250 years ago for George Washington. "Similarly", he said, "we take an exhaustive, investigative approach to investment research", talking about his firm's name. Later, Lamarco moved to New York, where he began working out of a Brooklyn apartment. Like other short sellers, the three-person team at Culper claimed it is out to expose deception, financial irregularities, and all the ways companies scam investors -- and, of course, make a profit. He initially targeted small firms, such as LifeMD, a telehealth company whose stock dropped from $21 in 2021 just before he published his research note to less than $2 within a year. He also accused Tecnoglass, a window manufacturer, of having ties to the Sinaloa drug cartel. The company denied that accusation and sued him for defamation. Lamarco's lawyers are seeking to have the suit dismissed.Before publishing his research on Nvidia and Megaspeed, he also tried to make a $1 million wager with late-night show host Jimmy Fallon, offering in his report to pay up if the TV presenter flew in electric air taxis made by Archer Aviation, a company that Culper was betting against. He never heard back.