Shares of RCI Hospitality Holdings ( RICK ) fell on Thursday before rebounding Friday on above average volume. The increase in trading comes with allegations shared by Bear Cave Research's Edwin Dorsey.

What Happened: The owner of nightclubs, gentlemen's clubs and sports bar restaurants is facing increased interest from investors after Dorsey published an update on the company Thursday.

"Today's special investigation is our shortest ever. The primary evidence is one photo taken from a public sidewalk last night," Dorsey wrote.

The photo shared is alleged to show that Rick's NYC location was raided on Wednesday night. Bear Cave alleges that other RCI Hospitality ( RICK ) locations may have also been raided during the week.

"Numerous law enforcement agents were both outside and within public view inside of Rick's property, although there did not appear to be any emergency or emergency vehicles in the area. The Rick's location also indicated it was closed for the entire night," Dorsey wrote.

Dorsey also said that RCI's CEO Eric Langan (@RicksCEO on X) had not tweeted since May 16, marking his longest X break over the last year. Langan has tweeted since the report was published.

In the report, Dorsey said RCI Hospitality ( RICK ) should disclose to investors if there was a raid, how many locations were raided and why law enforcement was at its properties.

Dorsey reached out to Langan and Mark Moran, whose Equity Animal has handled external investor relations for the company. Other than getting insulted by Moran, Dorsey did not publicly hear back from either individual.

A tweet from Dorsey lays out the alleged timeline of several raids at multiple locations. Dorsey has also been sharing accounts from employees of company locations that were shared on the r/Stripper subreddit.

Benzinga reached out for comment from two contacts listed on RCI Hospitality's ( RICK ) site for investor relations.

Related Link: RCI Hospitality Sees Sales Uplift In Nightclubs, Challenges In Bombshells For 1Q24

Why It's Important: Along with the raid allegations, Dorsey wrote that RCI Hospitality ( RICK ) has struggled with its restaurant concept, an NFT project, and tougher regulations.

Bear Cave previously published a short report on the company in 2022.

In May, RCI Hospitality ( RICK ) reported second quarter sales of $72.28 million and earnings per share of 90 cents, both of which missed Street consensus estimates.

Benzinga previously hosted a bear bull debate on X that included Moran, Dorsey and Langan discussing RCI Hospitality ( RICK ). That conversation can be watched below.

RICK Price Action: RCI Hospitality ( RICK ) shares closed 4% higher at $44.74 on Friday after trading down Thursday. Shares have traded between $41.79 and $79.46 over the last 52 weeks. The stock is down 33% year-to-date in 2024 and down 39% over the last year.

Read Next: Exclusive: Twitter Spaces ‘Bulls vs. Bears’ Debate With RCI Hospitality And Edwin Dorsey