Why IonQ Stock Is Sinking This Week
Key Points
Wolfpack Research issued a critical report on IonQ this week.
Holding a short position in IonQ, Wolfpack Research stands to profit from a decline in the quantum computing stock.
Investors shouldn't rush to sell IonQ stock in response to the critical report.
- 10 stocks we like better than IonQ ›
It hasn't been a very auspicious start to the new year for IonQ (NYSE: IONQ) stock. After dropping 10.9% in January, shares of the quantum computing specialist have been tumbling in the first week of February following a critical report on the company issued this week by Wolfpack Research.
According to data provided by S&P Global Market Intelligence, IonQ stock is down 23.9% from the end of trading last Friday through the close of Thursday's market session.
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Wolfpack alleges IonQ is engaged in some "serious shenanigans"
Taking a pessimistic view of IonQ stock, Wolfpack Research issued a critical report on the quantum computing company this week. The firm based its stance on numerous issues, including its conclusion that IonQ has lost funding for Pentagon contracts, a significant source of revenue that accounted for about 86% of sales from 2022 through 2024.
Wolfpack Research also expresses skepticism about the deal IonQ announced with utility company EPB last spring, stating that "IonQ engaged in some serious shenanigans to create the appearance of a large quantum computing sale in April with their supposed $22 million deal to build a quantum innovation center with EPB Chattanooga."
Summing up its position succinctly, Wolfpack Research states, "We think the wisest thing any investor can do is imitate management and sell this stock while it is still hot."
Should investors join the pack and click the sell button
While Wolfpack Research's critical report may be disconcerting to those who hold IonQ stock, it's important to remember that the financial firm has a material interest in seeing IonQ's stock tumble, as it holds a short position in the quantum computing company. Instead of rushing to trim -- or exit -- their positions in IonQ, a more prudent approach would be to wait and see how (if at all) the company responds to the critical report, as well as to examine the company's fourth-quarter 2025 financial report, which it plans to issue later this month.
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends IonQ. The Motley Fool has a disclosure policy.
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