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Enphase Energy, Inc., together with its subsidiaries, designs, develops, manufactures, and sells home energy solutions for the solar photovoltaic industry in the United States and internationally. 

The company offers semiconductor-based microinverter, which converts energy at the individual solar module level, and combines with its proprietary networking and software technologies to provide energy monitoring and control services.

Enphase employs a single-stage resonant converter for its microinverters. This means that power from the DC solar panels is converted directly into AC in a single stage, as opposed to two-stage converters which split the isolation and inversion functions.

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Enphase has shipped approximately 12 million microinverters, and more than 500,000 Enphase residential and commercial systems have been deployed in more than 100 countries.

The company also offers their Ensemble™ technology, so when the electric grid is down, your home still has power.  Traditional solar panel systems are still tied electric grids. So if the grid fails or is off-line, there will be no production out of the solar system, even if the sun is still shining. Ensemble technology is an energy management technology that uses a three tiered hierarchical control architecture, The three tiers work together to create a power system designed to respond quickly to fluctuating demand.

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In 2018, Enphase's revenue nearly doubled in 2019 to $624.3 million, from $316.2 million in 2018. Non-GAAP gross margin in 2019 was more than 35%, compared to 30.2% in 2018.  And here lies the issue. Prescience Point Capital Management is a private investment manager that employs forensic investigative techniques to unearth significant mispricings in global markets and they smell blood in them waters.

<blockquote>

In the new report, Prescience Point claims Enphase has fabricated financial statements and SEC filings.

“Based on our research, we estimate that at least $205.3m of its reported US revenue in FY 2019 was fabricated. Based on statements provided by former employees and other solar industry participants, it appears that the Company inflated its international revenue significantly as well,” Prescience Point alleges.

In addition, the firm claims a significant portion of Enphase’s gross margin expansion from the second quarter of 2017 to the first quarter of 2020 is fraudulent.

Enphase is allegedly using an India-based team to carry out accounting fraud.  Nearly all of the former Enphase employees the investigator interviewed claimed the company was fabricating financial numbers.  At least one former Enphase distributor in India terminated its relationship with the company due to concerns over potentially fraudulently inflated invoices.

</blockquote>

<center><a href="https://finance.yahoo.com/news/enphase-energy-short-seller-doubles-175047843.html">Source</a></center>

Today almost 30 million shares were bought and/or sold when the stock normal trades 7 million shares per day.  In addition, the Smart Money bought over 10,000 Aug put options at the $32.50 strike price.

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A couple of months ago, I noticed some unusual options activity in Luckin Coffee where there was heavy volume in the April contracts at the $15 strike puts.  Two weeks later news came out that the company was fudging their sales numbers second quarter of 2019 to the fourth quarter of 2019 to the tune of $310. That day in April the stock opened the day at $4.91, down 81% from the previous closing day’s price of $26.20 turning a $100 lottery ticket into $1900.

Now I'm not saying this trade will have the same success, heck the Smart Money could be wrong, but I have learned never to bet against the Smart Money.

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This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.

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