Sometimes the market just doesn't care what the short sellers think. That was the story for Twist Bioscience Corp (TWST) on Wednesday, as shares surged to a fresh 52-week high after Anthropic named the company an independent evaluator in a new AI-driven protein design campaign.
The bullish momentum completely overshadowed a scathing short report published on X by activist short-seller Scorpion Capital. The stock showed no negative reaction to the tweet, which is a bit like watching someone try to start a food fight in a library and everyone just keeps reading.
MarketDash reached out to Twist Bioscience for comment on the short seller's claims but didn't immediately hear back. Here's what investors need to know.
'Speculative Delusion'
Scorpion Capital's post labeled Twist's AI drug-discovery narrative a "speculative delusion," arguing that the recent market exuberance over the Anthropic protein-design project is entirely misguided. According to the short-seller, Anthropic's research paper refers to Twist strictly as an "external evaluator" and a commodity contract research organization for outsourced wet-lab production and testing services, not as a strategic AI technology partner.
In other words, Scorpion is saying: Hey, you're just the lab that runs the tests, not the brains behind the operation.
Questioning Analyst Hype
The report also took aim at Wall Street analysts from TD Cowen and Piper Sandler, accusing them of hyping the arrangement as a significant milestone. Scorpion pointed out that Twist filed a reactive Form 8-K under Item 7.01 (Regulation FD) rather than Item 1.01 for a material definitive agreement, which they argue clearly demonstrates the project's financial insignificance.
It's a technical distinction, but in the world of securities filings, it can speak volumes about how a company views the importance of a deal.
A 'Deflationary' Threat?
Scorpion's most interesting argument, though, is that Anthropic's findings are structurally bearish for Twist. Anthropic reported that its Claude-designed proteins achieved a 22% to 35% target-binding success rate, significantly outperforming the typical 10% to 15% benchmarks.
Scorpion contends this increased accuracy is highly deflationary because scientists will only need to order roughly half as many physical constructs per successful binder. If AI can design better proteins from the start, the demand for the physical testing and production services that Twist provides could shrink.
Scorpion Capital explicitly disclosed holding a short position in TWST shares Wednesday afternoon, so they're not exactly a neutral observer here.
TWST Shares Surge Wednesday
Despite all the bearish noise, Twist Bioscience shares closed up 22.64% at $142.39, hitting a new 52-week high, according to market data. The market has spoken, and for now, it's siding with the AI protein design story.
