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Grifols (GIKLY) Manipulating Financial Reporting Case
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- On January 9, 2024, Gotham City Research LLC published a report accusing Grifols of manipulating its reporting to distort reported leverage, while accurate leverage numbers would make Company’s shares uninvestable.
- On it, $GIKLY fell 24.55%, losing $2.6B+ of shareholder value.
- Investors may have grounds to suspect Grifols of deceptive reporting, which led to their losses.
On January 9, 2024, Gotham City Research LLC published a short-seller report accusing Grifols of artificially reducing leverage by consolidating earnings of units it doesn’t control and overstating profit. In addition, the report stated that Grifols manipulates reported debt & EBITDA to artificially reduce reported leverage to 6x which the researchers believe is closer to 10x-13x.
The report concludes if these estimates are correct, Grifols will face notably higher financing costs, and consequently, Company’s shares would be uninvestable.
On this news, $GIKLY fell 24.55% and lost over $2.6B billion of its market capitalization, seriously damaging shareholders.
Considering all the information, investors might have grounds to suspect Grifols of issuing fraudulent financial reports, which led to their losses.
The case is already under investigation by at least one of the reputable law firms.
Failure to Disclose,
Shock Event Date
09 January 2024