Tempus AI: A Recipe for Disaster or a Class Action Waiting to Happen?

Wesley ParkWednesday, May 28, 2025 8:56 pm ET
2min read

The market's verdict on Tempus AI (TEM) couldn't be clearer: shares plummeted 19.2% in a single day after Spruce Point's damning report exposed what looks like a house of cards built on aggressive accounting, shaky partnerships, and a revolving door of executives tied to firms that restated their books. This isn't just a stock correction—it's a red flag for every investor holding this stock. If you're still in TEM, here's why you need to act now.

The Accounting Alchemy: When “AI Revenue” Is a Mirage

Spruce Point's forensic analysis isn't just skepticism—it's a roadmap to potential material misstatements. Let's start with the math: Tempus claims to be an AI-driven precision medicine company, yet its AI-related revenue was a paltry $12.4 million in 2024—just 2% of total sales. The rest? A stew of legacy billing practices and deals that reek of round-tripping.

The company's use of billing code 81479—a catch-all for “genetic testing” that's notoriously easy to abuse—raised eyebrows. But the real kicker is the SoftBank joint venture, SB Tempus, which Spruce Point alleges is a “cash loop” to inflate revenue. If true, this isn't just poor accounting—it's fraud. And fraud, folks, is the lifeblood of class action lawsuits.

The Executive Ties: A Pattern of Exit-and-Scam

Tempus's leadership isn't exactly a who's-who of integrity. Founder Eric Lefkofsky has a history with companies like Groupon and Echo Global Logistics, which cratered after public offerings. Meanwhile, board members and executives are linked to firms like Celsius Holdings and Theranos, which restated financials or faced regulatory scrutiny. This isn't coincidence—it's a pattern.

When a company's leadership has a habit of “cash out and bail,” it's a signal to investors: run. If regulators start digging into Tempus's books, you can bet the spotlight will fall on these ties. And when it does, shareholder lawsuits will follow.

Partnerships? More Like Paper Tigers

The AstraZeneca and Pathos AI deals? They sound impressive—until you read the fine print. Spruce Point argues these partnerships involved non-cash transactions and related-party deals, meaning Tempus might be booking revenue from entities with ties to its own executives. That's not growth—it's financial sleight of hand.

Investors, remember this: if a company's “partnerships” can't survive scrutiny, its valuation is built on air. And when the air pops, lawsuits are the only thing left to hold onto.

Why This Isn't a Dip to Buy—It's a Disaster to Exit

TEM's stock is down 19%, but the real damage might be just beginning. Spruce Point projects a 50%–60% downside, and the sell-side consensus target of $66.82 implies only 1% upside. This isn't a correction—it's a reckoning.

Here's the wake-up call: if you're still in TEM, you're not just gambling with your money—you're trusting a company that's shown it'll prioritize fancy accounting over shareholder value.

Your Playbook to Survive This Meltdown

  1. Sell now, litigate later. Dump TEM immediately. Even if you think it's “undervalued,” the risks here are existential.
  2. File a class action claim. Firms like Rosen Law Firm or Pomerantz LLP specialize in证券 fraud. Contact them—stat.
  3. Demand answers. Push for an independent audit and SEC investigation. Silence from regulators? That's a red flag in itself.

Final Warning: This Isn't a Story—It's a Cautionary Tale

Tempus AI isn't just another biotech stock—it's a case study in how overhyped valuations, weak governance, and aggressive accounting can blow up in investors' faces. The market has spoken. The lawyers are waiting. And you? You can't afford to stay in this one.

Action Plan: Sell TEM. Sue if you must. And never again mistake hype for substance.

The clock is ticking. Don't let your portfolio become the next headline in this disaster.

This article is for informational purposes only. Investors should consult with a financial advisor before making decisions.