Shares of TEN Holdings Inc (NASDAQ:XHLD) are in the spotlight Monday morning following the publication of a report by Fugazi Research. The report alleges that XHLD exhibits characteristics of a third-party pump and dump scheme driven by aggressive stock issuances and a thin public float.
TEN Holdings did not immediately respond to Benzinga’s request for comment.
Here’s what investors need to know.
- TEN Holdings stock is taking a breather. What should traders watch with XHLD?
Focus On Bancroft Capital’s IPO Track Record
Central to the research note is TEN Holdings’ lead underwriter, Bancroft Capital. Fugazi alleges that Bancroft has a history of taking microcap companies public that subsequently become apparent pump and dump targets.
The report states that nine of 12 recent Bancroft-underwritten IPOs traded 54% to 98% below their issue prices as of May 2026, while two others faced regulatory suspensions or halts following unusual volatility and suspected social-media-driven promotion.
“XHLD shows every visible symptom of a pump-and-dump scheme run by unidentified third parties exploiting a thin float and a low-quality underwriter IPO structure,” the short seller said.
Financial Performance and Share Dilution
Fugazi Research highlighted a contraction in TEN Holdings’ core business, noting fiscal 2025 revenue fell 11.4% year-over-year to $3.1 million while net losses expanded to $19.5 million. To maintain compliance with Nasdaq’s $2.5 million minimum stockholders’ equity requirement, the company relied heavily on equity financing.
Following a 15-to-1 reverse stock split in December 2025, subsequent share sales expanded the total share count by approximately 201% over a six-month period.
Regulatory Inquiries and Capital Allocation
The short report details ongoing federal scrutiny, pointing to a grand jury subpoena and a parallel SEC investigation into XHLD’s IPO and $5.4 million in post-IPO advisory contracts.
Fugazi also raised questions regarding a $500,000 private placement sold to an individual investor whose address corresponds to an agricultural farm in Hainan, China.
Citing the underwriter’s history and extreme price swings, Fugazi warned retail investors of potential discretionary Nasdaq T-12 trading halt risks.
XHLD Price Movement Monday
XHLD Price Action: TEN Holdings shares were trading flat at $7.66 at the time of publication on Monday, according to Benzinga Pro data. The stock is up more than 360% over the past month.
Image: Shutterstock
Login to comment