r/chinastocks
$GCT had two stories. Neither was true. $2.75M settlement, late claims open.
GCT settled for $2.75M after reports exposed fake AI claims and undisclosed related-party revenue driving over half its sales.
- AI capabilities were significantly overstated and largely just marketing language.
- Over half of revenue came from undisclosed related-party transactions controlled by insiders.
- Stock dropped 18.8% following short-seller reports, leading to a $2.75M class-action settlement.
- The AI story: GigaCloud presented itself as a logistics innovator powered by artificial intelligence, optimizing B2B e-commerce for large-parcel merchandise like furniture and fitness equipment. Smart routing, tech-driven efficiency, competitive moat. The kind of AI narrative that was moving stocks in 2022.
But, investigators found the AI capabilities were significantly overstated. The technology edge was largely marketing language.
- The revenue story: GigaCloud reported rapid marketplace growth with high customer engagement. Strong numbers. Diverse buyer base. Platform scaling.
But, Culper Research and Grizzly found that over half of GigaCloud's revenue came from related-party transactions, companies controlled by insiders. Not disclosed in any regulatory filing. The "customers" driving the growth numbers were connected to the people running the company.
- September 28, 2023: Both reports land simultaneously. $GCT drops 18.8% in one session.
Then, investors sued in October 2023. GigaCloud settled for $2.75 million in May 2025. Late claims still being considered.
Eligible if you held $GCT between August 18, 2022 and September 27, 2023. Payout: \~$0.057/share.
Fake AI claims and undisclosed related-party revenue in the same company is a remarkable combination. Anyone here follow Chinese B2B e-commerce stocks closely enough to have caught this before Culper dropped the report?