Investing.com -- New Era Energy & Digital (NASDAQ:NUAI) stock tumbled 5% on Friday after short seller Fuzzy Panda Research released a scathing report targeting the company.
The short seller’s report, titled "NUAI: Serial Penny Stock CEO Combined Bad Gas Assets, Paid Stock Promo, Renamed Co & Added ’AI’," alleges that the company spent 2.5 times more on stock promotions than on operating its oil and gas wells. Fuzzy Panda claims CEO E. Will Gray II has a history of running penny stock companies "into the ground" over approximately 20 years.
According to the report, New Era Energy & Digital, which recently pivoted from helium extraction to AI data centers, lacks the gas production capacity to support its announced plans. Fuzzy Panda alleges the company’s aging wells can only produce about 5% of what would be required for its stated objectives.
The short seller also highlighted what it describes as suspicious related party transactions, including a $4 million loan to a former chairman that represents approximately 30% of the company’s cash. Additionally, the report notes that the company’s CFO and three out of four independent board members resigned last spring.
Fuzzy Panda further claims that New Era lacks necessary permits, guaranteed financing, and data center engineering expertise to execute its AI data center strategy. The report also points to satellite images showing undeveloped land where the company had promised to build facilities.
New Era Energy & Digital, which came public via a Roth SPAC in 2024, has seen its stock rise significantly since September when it reportedly began a paid stock promotion campaign that Fuzzy Panda says is set to end on December 13.
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