(Yicai) Nov. 28 -- Shares of SenseTime Group stabilized after plunging today as the Alibaba-backed artificial intelligence pioneer said it is pondering its next move while refuting Grizzly Research's short-seller report of inflated revenue.

SenseTime [HKG: 0020] fell 4.9 percent to close at HKD1.37 (US 18 cents) after falling as much as 9.7 percent intraday. The shares are over 60 percent down from the initial public offering price of HKD3.85 nearly two years ago.

"The company’s board of directors is reviewing the allegations and considering the appropriate course of action to take to safeguard the interests of all shareholders," the Hong Kong-headquartered video surveillance equipment provider wrote in a bourse filing today.

“The report is without merit and contains unfounded allegations and misleading conclusions and interpretation. It also shows a lack of understanding of the company's business model and financial reporting structure.”

New York-based Grizzly Research published a report earlier today, claiming that the computer vision company has been engaging in a "revenue round-tripping" program to fund sales of products to third parties without delivering the goods. The short-seller said that SenseTime's core business, facial recognition, lacks the ability to turn a profit and that the company's two big shareholders Alibaba Group Holding and SoftBank Group are dumping the stock.

An insider at SenseTime said to The Paper that the content of the short-seller report is old information that Grizzly Research mixed together and it includes many false statements and misunderstandings of SenseTime's businesses. SenseTime has already responded to the issues at different time points, the person added.

SenseTime has not been profitable since it went public in December 2021. In the first half, its net loss narrowed to CNY3.1 billion (USD397.8 million) while revenue increased by 1 percent to CNY1.4 billion, per the latest financial results.

As of June 30, founder Tang Xiaoou remained SenseTime's biggest shareholder with a 20.6 percent stake, the results showed. SoftBank and Alibaba are the second and fourth-biggest stockholders with portions of 10.8 percent and 4.6 percent, respectively.

Editor: Emmi Laine