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Investing.com -- Shares in Stride Inc. (NYSE:LRN) were lower in early US trading on Wednesday after Fuzzy Panda Research announced it was short the education technology company.

In a report, the short-seller alleged that Stride, a for-profit provider of online and blended education, has not told investors about the impact of the recent expiration of pandemic-era federal relief funds.

Stride's management "misled" shareholders when they said that the company had received "little to no" benefit from a $190 billion US government aid program for elementary and secondary schools, according to unnamed former executives cited by Fuzzy Panda.

In particular, the executives said Stride garnered a windfall of more than $330 million from the program, "and much of that flowed to the corporate bottom line," Fuzzy Panda added. They estimated that these funds accounted for "over 25%" of earnings before interest, taxes, depreciation and amortization.

"Former executives told us Stride captured abnormally high margins of the Covid funds because there were few specific requirements on how they could be spent," Fuzzy Panda said.

However, following the expiration on Sept. 30 of these funds, Stride is now "set to fall off a Covid cliff," Fuzzy Panda warned.

Stride did not immediately respond to a request for comment, according to Bloomberg News. Investing.com could not independently verify the validity of the claims made in Fuzzy Panda's report.

Shares in Stride, which posted annual net income of $204.2 on revenue of $2.04 billion in August, have jumped by more than 14% so far this year.

Earlier this year, Fuzzy Panda said it had uncovered "extensive allegations of insurance fraud" at Globe Life (NYSE:GL) that was ignored by the insurer's management. Shares in Globe Life, which denied the claims, plummeted to their lowest in over a decade at the time.

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