Sivers Semiconductors: Short Sellers Circle as Accounting Quirk Distorts a Painful Quarter

Sivers' Q2 revenue fell 12%, EBITDA loss widened, and new short positions from Citadel and Arrowstreet added pressure after a 15% stock drop.

The Swedish chipmaker's stock has become a battleground. Fresh short positions from Citadel Securities and Arrowstreet Capital, disclosed in mid-August, arrived just as the shares were already reeling from their worst single-day drop in recent memory — a 15 percent slide on Friday that left the stock at EUR 2.44 and erased a quarter of its value over the course of the week.

The timing of those new bearish bets is hardly coincidental. They landed in the immediate aftermath of Sivers' second-quarter report, a document that handed skeptics plenty of ammunition even as the company pointed to a technicality that flattered the damage.

The headline numbers tell only part of the story

Net revenue for the quarter came in at SEK 53.8 million, down 12 percent year-on-year (10 percent in currency-adjusted terms) from SEK 61.4 million. Adjusted EBITDA swung to a loss of SEK 35.5 million, versus a SEK 20.9 million deficit in the same period last year. The unadjusted figure looked far worse: a SEK 98.3 million loss compared with SEK 22.5 million a year earlier, dragging the operating result to minus SEK 116.9 million.

Buried inside that deterioration is a non-cash charge that goes a long way toward explaining the scale of the swing. Sivers booked SEK 42.9 million in social security contributions tied directly to the extraordinary run in its own share price — a liability that ballooned because the stock had surged from SEK 10.71 to SEK 63.15 during the reporting period before subsequently retreating. Strip that out, and the operational picture, while still weak, looks considerably less alarming.

That nuance was lost on Sweden's Dagens Industri, whose blunt warning to investors to avoid the stock helped trigger Friday's sell-off. The paper branded the interim report "catastrophic," a verdict that resonated with a market already jittery about the company's direction.

A deliberate pivot that has yet to pay off

Management's defense is that the revenue decline reflects a strategic choice rather than fading demand. The company is deliberately shifting away from development-driven NRE revenue toward scalable product sales — a transition that compresses near-term numbers but is supposed to build more durable income streams. The hardware business itself grew 13 percent (18 percent currency-adjusted), evidence, the company argues, that the underlying product engine is functioning.

The payoff, however, is still a ways off. Sivers says the benefits of the restructuring should become visible in the fourth quarter of 2026 and accelerate through 2027 as multiple programs reach series production.

Supporting that narrative is a pipeline that has swelled to USD 1.2 billion as of July — a 268 percent jump since December. The company also announced a new USD 3.4 million program with SemiNex to develop InP light sources for AI-focused data centers, and investor Bootstrap Europe exercised all of its warrants from the existing debt facility.

On the balance sheet side, a capital raise brought in gross proceeds of SEK 825 million, and a USD 12 million convertible loan was converted into equity — moves that strengthen the company's financial position even if they do nothing to quiet the bears.

Insider sales and a shifting short base

Complicating the picture further is a wave of insider selling that followed the expiration of lock-up agreements for board and management in July. Chairman Bami Bastani sold 275,000 shares, gifted 70,000 to family members, and donated 60,000 to charity. Headwaters Capital, which represents board member Todd Thomson, disposed of 950,000 shares and transferred 50,000 to a charitable organization. Reports also surfaced of a potentially undisclosed sale by a major shareholder, though details remained murky.

Meanwhile, the short-seller roster is in flux. D.E. Shaw has disappeared from the list of publicly disclosed short positions, replaced by Citadel Securities and Arrowstreet Capital. For institutional bears, the immediate earnings trajectory typically outweighs medium-term growth promises — which may explain why new positions were established precisely when the stock was most vulnerable.

A stock caught between trend lines and volatility

The technical picture offers little comfort. After Friday's drop, the shares trade 38 percent below their 50-day moving average of EUR 3.94 and sit 76 percent beneath the 52-week high of EUR 10.23 reached during the spring's rally. The RSI reading of 37.2 suggests the stock is not yet oversold, while annualized volatility of 169 percent underscores just how frayed trading has become.

The central question for investors is whether Dagens Industri's harsh assessment captures the company's true operational state, or whether the social security accounting charge has obscured a more constructive story playing out beneath the surface. With new short sellers now positioned against the stock, the market's answer, for the moment, appears to lean toward the former — though the USD 1.2 billion pipeline and the product-level growth suggest the debate is far from settled.