Pure Storage stock fell 3% after hedge fund Kerrisdale Capital announced it had taken a short position in the enterprise storage company. This move was accompanied by a bearish view on Pure Storage's prospects.
Kerrisdale Capital stated that Pure Storage's core products are 'undifferentiated' and its market share is 'stagnant.' The hedge fund also questioned the company's hyperscaler prospects beyond its deal with Meta Platforms.
Furthermore, Kerrisdale Capital argued that Pure Storage's software business does not warrant a SaaS multiple, suggesting an overvaluation. This direct criticism from a short-seller introduced negative sentiment into the market regarding the company's fundamentals and valuation.
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