After losing more than half its value in just five months, ExOne Co (NASDAQ:XONE) had a spectacular bull run in June, and a particularly sharp rise on July 1, that left analysts scratching their head. The 3D printing company had falling revenues, rising losses, and fewer machine sales while market sentiment was turning against the entire sector. Now a pair of SEC filings (caught by Copperfield Research) both explain the recent rally and raise questions about who was behind it.

ExOne

Pair of SEC filings difficult to explain

Early on July 7 a group of investors made up of Novel Century Ventures Ltd and Mega Fame Holdings Ltd, which share the same offshore PO Box, and a person named Tu Guihua who is listed as the director of the two companies filed a Form 3 indicating that they owned more than 2 million shares of ExOne Co (NASDAQ:XONE), about 15% of the company’s total float. The only other filing made by this trio is a 7% stake in MakeMyTrip Limited disclosed on June 30, and there isn’t any more information about them readily available. That’s probably enough demand to explain the rise in ExOne’s stock price.

Literally minutes later the same group filed a Form 4 indicating that it had started selling off its position in ExOne Co (NASDAQ:XONE). It only sold about 2,925 out of more than 2 million shares, but it still seems bizarre that the group would change direction so suddenly. It’s also weird because, as Copperfield Research points out, going above 10% ownership triggers the short-swing profit rule that forbids insiders from making a profit if they buy and sell with a six-month period. This could be a short squeeze, because it’s hard to see how else the group could hope to turn a profit as ExOne’s stock price falls back to previous levels (it was down 10% in trading yesterday).

No one accusing ExOne management of wrongdoing

Copperfield Research caught the pair of filings because they are short ExOne Co (NASDAQ:XONE), but they aren’t suggesting that ExOne management is involved. The short interest surrounding ExOne has to do with the company’s weak financials, and no one is accusing it of fraud. But that same short interest and the relatively low market cap may have been what attracted other investors to start a short squeeze in the first place.