Ubiquiti Inc (NYSE:UI) shares are trading lower Tuesday morning after Hunterbrook Media published an investigation alleging the networking company's equipment helps support Russia's military communications, including drone operations in Ukraine.
Short Seller Report Targets Ubiquiti Stock
Hunterbrook reports that Russian military units and fundraising groups have been sourcing Ubiquiti radio-bridge antennae despite U.S. export bans, describing the gear as essential and lacking viable alternatives.
Benzinga reached out to Ubiquiti for comment on the report. The company did not immediately respond.
The investigation cites Russian vendors, imagery and Ukrainian military sources and says some units using Ubiquiti equipment have been accused of war crimes.
Hunterbrook Capital disclosed that it is short Ubiquiti shares and long a basket of peers, meaning it stands to benefit if Ubiquiti's stock declines.
Sanctions, Compliance Questions Raised For Investors
The report alleges that shipments of Ubiquiti products into Russia have risen about 66% in value since the 2022 invasion, aided by official distributors and intermediaries in Turkey, Kazakhstan and other third countries.
Hunterbrook noted that Russian drone strikes on civilians have been described by the United Nations as crimes against humanity and said Ubiquiti hardware helps power frontline links.
The report also highlights past penalties tied to shipments into Iran and questions whether Ubiquiti's lean business model has underinvested in sanctions compliance and channel monitoring.
UI Price Action: Ubiquiti shares were down 1.32% at $541.74 at the time of publication on Tuesday, according to Benzinga Pro data.
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