Grifols shares suffer worst week on record after short-seller report
MADRID (Reuters) - Shares in Spanish pharma firm Grifols dropped another 10% on Friday, bringing their weekly loss to nearly 40% after short-seller Gotham City Research accused the Barcelona-based business of manipulating its financial accounts.
The fall since Monday is the biggest weekly tumble on record amid a surge in trading volumes, according to LSEG data.
When contacted by Reuters this week, Grifols rejected Gotham's allegations, which were made in a report published on Tuesday.
Grifols, which makes medicines from human blood plasma, has also said it will sue the short-seller and seek compensation.
After Friday's fall, the company's stock traded at 8.87 euros by 1710 GMT, but above a low of 8.1 euros ($8.87) hit on Tuesday.
Gotham's report has wiped more than 3 billion euros from Grifols' value.
Grifols management held a call with analysts on Thursday when executives said they did not foresee any problem closing a $1.8 billion sale of a stake in Shanghai RAAS Blood Products - the proceeds of which will be used to help repay debts due in 2025.
Analysts at Mirabaud said in a note that uncertainty about whether Grifols can clinch the sale of the stake to Chinese firm Haier Group at the agreed terms was weighing on the shares.
Among the allegations, Gotham says Grifols has been artificially manipulating its debt and earnings through transactions with a related entity, to the effect that its leverage ratio is nearly double what Grifols has reported.
Grifols rejects the accusations and says its financial accounts have been signed off by auditors and regulators.
"[W]e believe that the reputational damage has already been done and the mere suspicion of irregularities could continue to generate volatility in the share price," the broker of Spanish bank Sabadell said in a note to clients.
($1 = 0.9129 euros)
(Reporting by Jesus Aguado and Matteo Allievi; Writing by Tommy Reggiori Wilkes; editing by Barbara Lewis)
