Fly-E Group shares are reeling after a brutal week marked by a negative pre-announcement and a scathing short-seller note alleging fraud and safety lapses.

The stock is now on track to record its fourth straight session of losses on Wednesday, extending a volatile stretch since Aug. 14 when the preliminary figures first surfaced. 

It opened at $7.77 on Aug. 15 and collapsed to $1.00 by the close, marking an 87% plunge in a single day. 

Shares dropped another 22.7% to $0.62 on Tuesday and slipped a further 1.1% to $0.61 in premarket trade on Wednesday.

Fly-E lost $2 million, or $0.3 a share, for the three months ended June 30 compared to a $0.2 million, or $0.04 a share loss in the year-ago quarter. EBITDA loss widened to $1.3 million from a small profit in the prior-year period.

Net revenue slumped 32% to $5.3 million as unit sales plunged to 10,448 from 16,880 and average prices eased to $960 from $1,053. 

Retail sales crashed 45% to $3.8 million due to store closures on the back of safety concerns over lithium battery fires and a return to oil-powered scooters by some customers.

Gross profit tumbled 27% to $2.3 million, even as the gross margin improved to 42.4% from 39.4% due to rental income. Operating expenses jumped nearly 20% to $3.8 million as administrative expenses soared 60% driven by higher audit, legal and consulting fees, as well as higher depreciation.

Fly-E had cash of $2.3 million at quarter's end, an increase from $800,000 as of March 31, but the continuous losses have put pressure on the financial position.

The disappointing results follow a scathing report last week from short-seller Edwin Dorsey’s The Bear Cave, which alleged that overseas stock scammers are manipulating the $136 million company. The stock is in the “final phase of a pump-and-dump scheme,” and the company sells unsafe products that endanger New Yorkers, the report alleged.

On Stocktwits, retail sentiment for Fly-E was ‘extremely bullish’ amid ‘extremely high’ message volume.

One user said Flye-E could see a “monster move” from here, while another said the stock was “down too hard, too fast” and that any company defense against fraud allegations could send it “to the moon.”

Fly-E’s stock has declined 85.3% so far in 2025.

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