Richtech Robotics plunges 21% as Microsoft denies partnership claims
Hunterbrook report reveals 'standard customer engagement' with no commercial element
Richtech Robotics shares plummeted 21.8% to $3.97 on Thursday after Microsoft clarified that its relationship with the Las Vegas-based robotics company was a "standard customer engagement" with "no commercial element," contradicting Richtech's earlier announcement of a "close collaboration" that had driven a 40% stock surge two days earlier.
The dramatic reversal wiped out more than $300 million in market value and prompted investigations by multiple law firms seeking to determine whether Richtech misled investors about the nature of its partnership with the technology giant. Shares closed at $3.99, down from a high of $5.58 earlier in the week, according to market data.
The stock's volatility began on Tuesday when Richtech announced what it described as a "close collaboration" with Microsoft through its AI Co-Innovation Labs, claiming the partnership would "accelerate the development and deployment of agentic AI in robotics." The news sent shares soaring 40% to $5.58, giving the company a market capitalization of approximately $1.2 billion.
However, Hunterbrook Media, an investigative newsroom that disclosed holding a short position in Richtech, published a report challenging the substance of this partnership. The report cited Microsoft's characterization of the engagement as a "standard customer engagement focused on exploring and prototyping AI solutions using Microsoft technologies," explicitly stating there was "no commercial element" to the relationship.
Microsoft's AI Co-Innovation Labs program offers complimentary, one-week development sprints to customers and partners, according to information on Microsoft's website. Hunterbrook alleged that Richtech misrepresented this routine customer training session as a substantial commercial partnership to inflate its stock value.
"Richtech's press release did not specify the non-commercial nature of the relationship, despite it being mentioned in a delayed 10-K filing," according to the Hunterbrook report, which was published on January 29.
The timing of the collaboration announcement is now under scrutiny. On Wednesday, just one day after the stock surge, Richtech announced a $38.7 million private placement of shares at elevated prices, which Hunterbrook suggested was strategically timed to capitalize on the inflated valuation. The company, which missed its original 10-K filing deadline and an extended deadline, faces potential Nasdaq delisting concerns and restricted access to capital-raising mechanisms like Form S-3 shelf offerings until at least January 2027.
Financial data reveals Richtech's precarious position. The company reported fiscal year 2025 revenue of $5.045 million against a net loss of $15.754 million—nearly double the previous year's losses. With a trailing twelve-month price-to-sales ratio of 235.5 and negative operating margins, the company has frequently relied on shareholder dilution to fund operations.
Block & Leviton, a securities litigation firm, announced it is investigating Richtech for potential securities law violations, focusing on whether the company made false or misleading statements regarding the Microsoft relationship. The investigation centers on allegations that Richtech "characterized a non-commercial participation as a 'close collaboration' while Microsoft stated it was a standard customer program without a commercial element."
This is not the first time Richtech has faced allegations of questionable practices. In September 2025, short-seller Capybara Research published a report accusing Richtech of being a "China Hustle" with alleged fraud, insider self-dealing, and fabricated partnerships. That report also cited a lawsuit concerning defective robots and alleged the company was rebranding off-the-shelf robots as proprietary technology.
Analyst sentiment on the company is split, with one buy rating and one sell rating according to market data. The stock's 52-week high of $7.43 now seems distant, though it remains above its 52-week low of $1.37, reached during earlier volatility.
The incident highlights growing scrutiny of technology companies' partnership announcements, particularly those involving AI collaborations with major technology firms. Investors have become increasingly wary of companies that appear to overstate relationships with established players to boost valuations in the competitive artificial intelligence and robotics sectors.
Richtech did not immediately respond to requests for comment from multiple media outlets, including Benzinga, regarding the Hunterbrook report and Microsoft's characterization of their relationship. The company's official website still features the Microsoft collaboration announcement as a key partnership, though it has not issued a clarifying statement since Microsoft's response became public.