Grifols Closes with a Drop of 26% After the Gotham City Research Report

Grifols shares have finally closed the session this Tuesday trading at 10.55 euros on the Madrid Stock Exchange, which represents a drop of 25.91% compared to the price it marked the previous day , after the report published this Tuesday by Gotham City Research, in which he questions the company’s accounts.

The company held an extraordinary meeting this afternoon to analyze the impact of the Gotham report. Specifically, as Europa Press has been informed by market sources, the board meeting is being held this afternoon with the aim of clarifying “more forcefully” the points of said report , which should serve to calm the market in the short term.

In addition, the company plans to send tomorrow to the National Securities Market Commission (CNMV) a third relevant fact with which the company will try to dismantle point by point the arguments put forward by the bearish firm in its report.

Likewise, the company plans to hold a conference call with investors tomorrow, Wednesday, with the aim of refuting Gotham City Research’s accusations, according to analysts from Banco Santander and Citi cited by Bloomberg.

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Grifols plans to hold a conference call with investors tomorrow, Wednesday, with the aim of refuting the accusations

Thus, the intraday minimum was marked at 10:31 a.m., with 8.22 euros, after the stock spent an hour and a half in a volatility auction trying to match buy and sell orders and set a price. Subsequently, the stock has regained strength and even marked an intraday high of 11.40 shortly before the close .

The price has reacted in this way after the bearish firm Gotham City Research published a report early in the morning in which it accused the pharmaceutical company of manipulating its debt ratios and gross operating profit (Ebitda) to artificially reduce leverage, which is why it warns that its shares would be “non-investable.”

Gotham points to other red flags, including undisclosed transactions with Grifols related parties, which would reveal that, at the very least, the quality of Grifols’ results “leaves much to be desired.”

The fund informed the National Securities Market Commission (CNMV) on Monday of a short position on Grifols of 0.57% of the capital. In this way, the shares at Monday’s closing price were valued at 34.6 million euros. With the price at which the shares closed today, the potential profit for Gotham is about 9 million euros .

Gotham informed the National Securities Market Commission (CNMV) on Monday of a short position on Grifols of 0.57%

The president of the CNMV, Rodrigo Buenaventura, has stated that the financial regulator “is going to exercise its powers to clarify the situation . ” Thus, he is going to gather additional information to clarify the situation, although he has warned that it does not make sense, for the moment, to cast doubt on the company’s accounts.

The CEO of Spanish Stock Exchanges and Markets (BME), Javier Hernani, has expressed himself along the same lines, pointing out that “it is still too early to draw any conclusions ” and has praised the functioning of the market mechanisms and its infrastructure after an opening marked by the volatility of the Catalan blood products company.

On the political spectrum, the Minister of Economy, Commerce and Business, Carlos Body, has asked for “prudence” in the face of the situation and to remain waiting for what the CNMV may say “to have a clearer vision.” In Catalonia, the spokesperson for the Government, Patricia Plaja, has assured that the president of the Generalitat, Pere Aragonès, will contact the company to analyze the situation.

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(Featured image by Nicholas Cappello via Unsplash)

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