VALENCIA. Grifols (GRF) recorded a 12% rebound on the stock market yesterday, after a day characterized by enormous volatility for the Catalan listed company. Not in vain fluctuated by more than 20% from 9.92 euros of the intraday minimum to 11.96 euros of the maximum. Finally, the world leader in blood products closed at 11,815 euros, which allowed it to recover almost half of the harsh punishment suffered the day before, equal to almost 26%. The reason was none other than Gotham City Research’s devastating report on the manipulation of debt to gross operating profit (Ebitda) ratios to artificially reduce financial leverage.
Before trading began, the GRF forwarded a third relevant fact to the National Securities Market Commission (CNMV) where it announced legal action “due to the significant damage caused.” It also “fully” supported its CEO, Thomas Glanzmann.; while cautioning that the board of directors “unanimously” approved all of Gotham’s disputed transactions. Meanwhile, minority shareholders of the company founded by the Grifols family said they are analyzing the British ‘cazatimos’ report before taking legal action.
This newspaper, mid-morning yesterday, confirmed from the CNMV public database that the hedge fund AKO Capital, one of the classic bears of the Spanish stock market, had not been listed short on Grifols, while the day before, as reported Valencia Square this Tuesday it had 0.41%; while also the high-risk English fund General Industrial Partners – controlled by Gotham and its ally Portsea Asset Management – had drastically reduced its position from 0.57% to 0.06% in a few hours.
Drilling Here to see the larger graph. Source: Yahoo Finance
For those who don’t know, it’s worth remembering that when someone is bearish on a specific value, The first thing to do is to “rent” the shares of the listed company in question – paying the price -, sell them on the market and then buy them back – regardless of whether the move goes well or not – because you have to return them. And Gotham did well because, at least, it pocketed capital gains of 11 million euros.
Needless to say, there was a lot of movement in Grifols stock throughout the session, even if that’s true 13.45 million shares changed hands compared to nearly 27 million the previous day. Likewise, the capitalization of the Catalan company rose to 5,035 million euros, but yes – and despite the strong rebound – it continues to lead the annual fall within the Ibex 35 with 23.55%.
“existential risk”
Meanwhile, analysts continue to talk about the Grifols case. There is the case of Roberto Scholtes, Head of Strategy at Singular Bank, stressed that he does not consider Grifols an “existential risk” for the company, although he will have to make “a great effort to clarify many elements that perhaps are not clear.” In his opinion, “there are some accounting practices that we can define as aggressive or questionable.” He did so while answering questions from the press during the presentation of the report on the financial perspectives for this year of the body led by Javier Marín, former CEO of Banco Santander.
Scholtes explained that his team studied “in detail all the accounts” of the Catalan pharmaceutical company, specifying that GRF is a “highly indebted” company that may lose the confidence of the markets. Therefore, it may be forced to pay much higher spreads in refinancing its debt and, as a result, undertake a dilutive capital raise for shareholders. There may be a greater risk of dilution for their shareholders, both because they will have to pay more for their debt and because they will have to issue more shares; but not because the company as such risks being a bluff“Scholtes added.
In the meantime, The general secretary of CC OO, Unai Sordo, expressed his “concern” about the situation of the Catalan company. He did so by ensuring that “we are concerned that these bearish – for Gotham – companies that float the idea of the insolvency of a real project like Grifols, could cause a decapitalization process of such caliber that it will wipe out the company,” Sordo said . at an information breakfast of said union.
The GRF’s response was immediate and sent a message of serenity to staff in a meeting with the unions., as UGT sources explained in a statement to Europa Press and CC OO. Company representatives stressed that the company does not communicate more quickly out of a desire to be careful with information and avoid misrepresentations that could have a negative impact, even though “it is very clear that it has not committed any fraudulent action or any mistake.”
Meeting with investors this Thursday
Likewise, the same sources regretted waiting for “some other response”; while the unions have requested a meeting with the company’s financial managers to be able to explain to them the doubts they have about the published information. From the UGT they highlighted the fact that the company has ensured that normality is maintained in daily operationsand that the volume of work is similar to that of recent months.
A Grifols who this Thursday will hold a conference call at 2.30 pm Spanish time with investors to deny Gotham’s “speculations”. The Catalan pharmaceutical company has ensured that at the end there will be a question and answer session in which only sales analysts will be able to ask questions, as the company led by Thomas Glanzmann reported to CNMV yesterday afternoon.
2024-01-11 05:03:41
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