Elf Beauty stock slides after Muddy Waters says it has shorted its shares
Published On :
By Nell Mackenzie
LONDON (Reuters) – Muddy Waters has taken a short position in cosmetics company Elf Beauty, the hedge fund’s chief executive Carson Block said at the Sohn conference in London on Wednesday.
Shares in Elf were down 10% on the day after Block alleged at the event that Elf had overstated its revenue over the past three years, possibly by as much as $190 million.
California-based Elf did not immediately respond to Reuters email and phone requests for comment on Block’s allegation.
Block said that Muddy Waters would sell down its short position in Elf upon publishing its report about the company, for fiduciary responsibility and risk management purposes.
Block questioned Elf’s explanation at the time of its results in November last year for an additional $37 million of inventory in the second quarter.
The company said at the time this was as a result of it taking ownership of inventory from China when it shipped rather than waiting for it to arrive at its U.S. distribution center.
Block said on Wednesday that Muddy Waters had spoken to Elf’s Chinese suppliers and a former manager in China and concluded that the way these inventory numbers had been accounted for were “categorically false”.
Muddy Waters alleged in a presentation that Elf overstated its inventory numbers in order to cover for insufficient sales.
Elf said in a public filing it had net sales worth just over $1 billion in the fiscal year ended March 31, 2024.
(Reporting by Nell Mackenzie; Editing by Dhara Ranasinghe and Alexander Smith)
Uma Rajagopal has been managing the posting of content for multiple platforms since 2021, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune. Her role ensures that content is published accurately and efficiently across these diverse publications.
-
-
NEWS4 days ago
Ant International sees robust growth across pillar businesses of payments, digitalisation, and inclusive financial services in 2024
-
-
-
BUSINESS2 days ago
Germany’s CompuGroup in talks about potential offer by CVC
-
-
-
FINANCE2 days ago
Rachel Reeves to push for UK/EU reset at finance ministers’ meeting
-
-
-
INVESTING2 days ago
At Gulf bitcoin gathering, Trump family and allies to bask in crypto industry’s euphoria
-