Grifols shares slump as short seller questions financial statements

09 Jan 2024
firstwordpharma.com
Acquisition
Grifols management on Tuesday scrambled to reassure investors after a report from hedge fund Gotham City Research wiped more than 40% off the drugmaker’s share price. Gotham City accused the company of manipulating its reported debt and earnings using "deceptive and incorrect" financial practices.
In response to the claims, Grifols said it "categorically" denies the allegations, contesting that the Gotham City report was based on "false information" and "speculation." The drugmaker clarified that it has disclosed all information about the transactions flagged by Gotham City "with the highest level of integrity and transparency.”
According to Gotham City, the debt ratio of GrifolsGrifols is close to 10 to 13 times earnings, rather than the six times officially reported by the company. Spain's market regulator the CNMV said Tuesday it was looking at the Gotham City report and would collect "the necessary data” from Grifols.
Last year, Grifols undertook a number of measures to win over investors, including workforce reductions and a leadership change. More recently, the drugmaker sold a 20% stake in a Chinese unit Shanghai RAAS  for $1.8 billion in a bid to reduce its debt.
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