Three weeks ago I was set to interview the president of Austin-based pet cloning company ViaGen, which is based in Cedar Park, when I got an email abruptly canceling the interview.
The PR contact told me that ViaGen's parent company, Intrexon, had seen its stock drop 26 percent that day.
"Naturally they're a little skittish about us doing any interviews right now," wrote ViaGen spokeswoman Lauren Aston.
At first I was disappointed I wasn't able to interview ViaGen - this fascinating local company does animal cloning, including horses, cattle, goat and sheep - and recently announced an expansion into pet cloning.
In October ViaGen Pets confirmed they had successfully cloned kittens.
After digging around to find out why the stock price sank so much I learned that Intrexon is under attack by short-sellers, hence the hesitancy to engage in media interviews. Its stock is down nearly 20 percent since April 1.
A mysterious outfit called Spotlight Research published two reports through Seeking Alpha, totaling 116 pages, that were critical of Maryland-based biotech company Intrexon Corp. (Read the second report by clicking here.)
Of course Spotlight does hold a "short" position on Intrexon, which means they are betting that its stock will go down. It's not uncommon for shorts to publish critical reports about companies to back up their positions.
This report basically says Intrexon has been around for 17 years but it's hard to tell what the company actually does or how it makes money. Intrexon isn't profitable currently, posting a $64.4 million loss in its most recent quarter.
One of the most damning accusations says the company overstated its revenue by more than 50 percent.
Intrexon disputes this, releasing a statement saying the report is "materially false and misleading." Intrexon blames a hedge fund seeking to discredit the company.
"The hedge fund, according to our information, desire to take a short position in the company's stock, was seeking a willing publisher of its report on the company, and intended to benefit from trading activity," Intrexon said.
Intrexon said it is the target of a campaign to manipulate its stock and destroy its reputation.
The biotech company has also been sued by several firms related to Spotlight's claims.
I'm not sure I fully understand what Intrexon does either but after sifting through some of their SEC filings and reading this fairly handy Motley Fool summary of this ordeal it seems that Intrexon sells a suite of technologies that help molecular biologists with cell and organism engineering.
What's in dispute is how much money the company really makes off this technology - both the Motley Fool and the short-sellers assert that it's next to nothing. The short-seller's report goes so far as to suggest there is accounting hanky-panky known as "round-tripping" with its collaboration and licensing agreements.
What is known is that nearly half of their $174 million 2015 revenue came from Trans Ova Genetics, which Intrexon acquired in 2014 for over $100 million. Trans Ova sells cattle breeding products and services.
But what's most interesting is that Trans Ova is the parent company of ViaGen, which it purchased in 2012.
It's unclear how much the turmoil at Intrexon might impact ViaGen, or even how much the cloning company even contributes to Intrexon's bottom line. Because ViaGen is a subsidiary of another Intrexon subsidiary it's nearly impossible to break out how much money Intrexon pockets from their animal cloning business.
The short seller's report doesn't even mention ViaGen and even Trans Ova only warrants three pages.
As an aside, I'm familiar with ViaGen because I had previously covered the company for the American-Statesman, back when they were focused on growing their cattle cloning business.
While referring questions about the short-selling attack to Intrexon, Aston did say that ViaGen is "insulated from any noise around stock volatility" and that it has no comment on anything outside of their direct business.