Five9 Inc (NASDAQ:FIVN) shares are on watch Thursday after The Bear Cave released a bearish report on the software company.
What Happened: Short-selling firm the Bear Cave has targeted contact center software company Five9 in its latest short report.
The short seller highlighted recent conversations with management in which executives told investors that AI is "great" for Five9. The Bear Cave claims that management has intentionally misled investors about how AI will impact its business.
"The Bear Cave believes Five9 management is lying to investors and the company is a major AI loser racing towards irrelevance," the short seller said.
Benzinga has reached out to Five9 for comment on the report.
The Bear Cave noted that Five9 has not posted an annual profit in any year dating back to its initial public offering in 2014. The weak bottom-line results have been overshadowed by strong revenue growth, but the company lowered its revenue guidance in its most recent quarter, the short seller said.
"Five9's slowing revenue growth and recent guidance reduction have left investors worried that AI might be negatively affecting the company," The Bear Cave said, citing questions surrounding AI concerns at an investing conference last month.
The short seller further highlighted management's response to AI concerns, noting that CEO Mike Burkland stressed that AI is a "great thing" for Five9 and expects only about 5% to 15% automation due to AI.
The Bear Cave cited previous research suggesting several call center companies are under pressure due to AI as many large companies are aggressively cutting call center spend. The short seller further noted that Five9 recently cut its revenue guidance and announced it was cutting its workforce by about 7%.
"The layoffs may also be a sign management doesn't believe in its own optimism around AI," the short seller said.
FIVN Price Action: Five9 shares rebounded and were up 2.72% at $76.57 at the time of publication, according to Benzinga Pro.
Photo: courtesy of Five9.
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