Pacific Current takes hit after Abacus short report

"Abacus boasts 30% returns with little to no risk, per investor presentations. Average industry returns in the space, however, hover around 12%, per trade publications and multiple experts we interviewed," Morpheus wrote in the report.

It claims that Abacus adopted a new valuation methodology just before listing via a special acquisition company (known as a SPAC), which allowed it to "revalue its portfolio periodically and book any increases in value as unrealised gains, or non-cash revenue".

PAC told the ASX it was aware of the short report, had some exposure to Abacus and that it "will continue to monitor its investment in ABL and will update the market if and when appropriate".

Meanwhile, Abacus released a statement in response calling the report a "false and misleading short attack" and said it would respond in more detail in the coming days.

"Our returns and valuation are audited, and consistent with a 20-year track record of generating positive revenue," Abacus chief executive officer Jay Jackson said.

"This is a copy and paste of fiction from our largest competitor, who has been shopping this story for months. Our success and growth put a bullseye on us, that’s fine – we are going to continue to grow."

Morpheus Research says it is an investigative research group that was launched earlier this year in the United States. Its team includes members of Hindenburg Research, a high-profile investment firm that focused on activist short seller before it shut down earlier this year.