Short Seller Alleges Oddity Tech is Misleading Investors

4 min read

A short seller named Ningi Research has thrown a wrench into the works for Oddity Tech, the parent company of beauty brands Il Makiage and Spoiled Child. On Tuesday, Ningi released a scathing 50-page report alleging that Oddity has been misleading investors about its business model and financial performance.

Oddity Tech: Disruptor or Deceptive?

Oddity Tech has positioned itself as a revolutionary force in the beauty industry. They claim to be a purely digital retailer, selling directly to consumers and disrupting the traditional way people shop for makeup. Their pitch centered around superior online sales strategies and impressive growth, outperforming established competitors.

However, Ningi Research paints a very different picture. Their report accuses Oddity of several key deceptions:

  • Not a Purely Digital Player: According to Ningi, Oddity operates a network of over 40 physical stores in Israel, its home base. This directly contradicts Oddity’s claims of being a purely online retailer.
  • Misleading Revenue Sources: Ningi alleges that a significant portion of Oddity’s profits come from these Israeli stores, not online sales in the US market as the company has portrayed.
  • Deceptive Billing Practices: Ningi claims Oddity utilizes subscription plans that are difficult for customers to cancel, potentially inflating repeat business figures.

These allegations raise serious questions about the accuracy of Oddity’s financial reporting and its future growth prospects. Investors reacted swiftly, with Oddity’s stock price dropping over 10% in early trading on Tuesday. The company has yet to respond to these accusations.

Breaking Down the Allegations

Let’s delve deeper into the specific claims made by Ningi Research:

  • Physical Stores vs. Digital Facade: Ningi alleges Oddity downplays or outright hides its network of physical Il Makiage stores in Israel. The report claims Ningi researchers visited these stores and confirmed they were company-owned, not franchises. This directly contradicts Oddity’s narrative of being a solely online business model.
  • Misleading Revenue Sources: Oddity has emphasized its strong online sales growth, particularly in the US market. However, Ningi suggests that a significant portion of the company’s profits actually originate from these undisclosed physical stores in Israel. This raises questions about the true source of Oddity’s revenue and the sustainability of its online sales figures.
  • Deceptive Subscription Practices: Ningi alleges Oddity utilizes subscription plans that are difficult for customers to cancel. This could potentially inflate repeat purchase figures and mislead investors about the true level of organic customer engagement. If customers are unknowingly locked into subscriptions, it doesn’t represent genuine brand loyalty or sustainable growth.

The Fallout: What it Means for Investors

These allegations from Ningi Research cast a shadow over Oddity Tech future. Investors who purchased shares based on the company’s claims of a disruptive online model and strong US market presence may feel misled. The potential for undisclosed physical stores and deceptive subscription practices could significantly impact their investment decisions.

Here are some key questions investors should consider:

  • To what extent do Oddity’s physical stores contribute to overall revenue?
  • Is Oddity accurately representing its revenue sources, particularly the contribution of Israeli stores compared to online US sales?
  • Are Oddity’s subscription practices truly transparent and easy for customers to understand and manage?

Until Oddity addresses these allegations and provides clear answers, the uncertainty surrounding its business model will likely continue to weigh on its stock price.

The Road Ahead for Oddity Tech

Oddity Tech needs to take swift and decisive action to address these allegations. Here are some potential steps they could take:

  • Issue a Public Statement: A comprehensive response directly addressing each of Ningi Research’s claims is crucial. Oddity should be transparent about the role of its physical stores, revenue sources, and subscription practices.
  • Independent Audit: Consider commissioning an independent audit to verify the accuracy of their financial reporting and business model. This could help restore investor confidence.
  • Review Subscription Practices: Evaluate their subscription plans and ensure they are clear, easy to cancel, and aligned with fair customer practices.

By taking these steps, Oddity Tech can begin to rebuild trust with investors. However, if the allegations hold true, the company faces a significant uphill battle to regain its reputation and market position.


The short seller report from Ningi Research has significantly impacted Oddity Tech. The future of the company remains uncertain, with investors left questioning the accuracy of its business model and financial performance. Only time will tell how Oddity responds to these allegations and whether they can regain the trust of

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