Grifols, a Spanish pharmaceutical company, is experiencing a sharp decline in its shares after being criticized by short-seller Gotham City Research for its financial reporting. The company, however, has denied these allegations.
As of 1013 GMT, Grifols shares have plummeted by 30% to EUR10.03. Earlier in the day, the stock fell by over 40%. If this downward trend continues until the market close, it would mark the stock's worst one-day performance to date, according to FactSet data.
In its report, Gotham City Research questions the accuracy of Grifols's debt-to-earnings ratio. Should Gotham City Research's estimations prove true, the firm suggests that Grifols shares may become "uninvestable" and potentially worthless.
Grifols, in response to these allegations, firmly rejects any claims of improper accounting or reporting practices. The company states that its financial records undergo annual audits and that it strives to provide accurate and transparent information, in accordance with its obligations as a publicly traded entity.
Gotham City Research alleges the presence of dubious accounting practices and undisclosed loans linked to Scranton Enterprises, a Grifols family entity. These actions, according to the report, serve to improve Grifols's public image.
Grifols counters these claims by asserting that all related-party transactions and disclosures mentioned by Gotham City Research have been fully disclosed and audited since 2018, and reported to the Spanish regulator.
Despite the current turmoil, Grifols remains steadfast in its commitment to upholding integrity and transparency in its financial reporting.