GigaCloud Technology Inc Responds to Short-Seller Report

EL MONTE, Calif., May 23, 2024 (GLOBE NEWSWIRE) -- GigaCloud Technology Inc (Nasdaq: GCT) (“GigaCloud” or the “Company”), a pioneer of global end-to-end B2B technology solutions for large parcel merchandise, today issued the following statement in response to the claims made in a report by Grizzly Research LLC, a short-seller, issued on May 22, 2024.

The short-seller report lacks merit and contains numerous defamatory, selective, inaccurate, incomplete and misleading statements, speculation, and innuendo. The report demonstrates a fundamental lack of understanding of the Company’s business particularly with respect to the types of buyers who use our marketplace and the services we provide them.

• Web Traffic
  
  The first allegation in the short-seller report is that the Company’s “web traffic does not square with its growth story.” The report misleadingly cites third-party data search traffic – but this does not reflect overall visitor traffic to the Company’s website. Indeed, as explained by the third-party cited in the short-seller report, the “Domain Overview” and “Organic Traffic” data provide data regarding search engine performance.¹ 
  
  This third-party also explains that “[e]stimates of total website traffic” are found in their “Traffic Analytics” tool.² The report omits this data, which shows significant web traffic measured by visits to the Company’s website of roughly 130,000 total visits and 11,000 unique visitors during April 2024, according to this third-party’s estimates.
  
  
  
  The Company’s marketplace is a business-to-business (B2B) platform, not a consumer-direct business. As previously disclosed, buyers in the Company’s marketplace are typically resellers (rather than end consumers) and this level of website traffic is fully consistent with the Company’s disclosures that it had approximately 5,010 active buyers on its marketplace during 2023.
  
  In other words, the Company’s business model is to sell in volume to a smaller number of customers than if it operated a consumer-direct business. In focusing only on search activity, the short-seller report misapprehends the nature of the Company’s business and misstates the overall traffic to the Company’s marketplace.
  

• Related Party Transactions
  
  The short-seller report claims that the purported lack of website activity is explained by allegedly undisclosed transactions with related parties. This claim is false and misleading for the reasons noted above: GigaCloud’s B2B marketplace has substantial monthly traffic. There is also no merit to the claims the short-seller makes about purported related party transactions. Following similar unsubstantiated allegations made in September 2023 by another short-seller, the Company carefully evaluated its customer relationships and has disclosed in its filings made with the U.S. Securities and Exchange Commission all related party transactions required by the applicable rules and accounting standards.