(Reuters) – Elf Beauty stated on Thursday accusations by short-seller Muddy Waters regarding the appeal firm overemphasizing its income and stock numbers were “without merit”.
Muddy Waters has actually taken a brief placement in Elf, asserting that the firm potentially overemphasized its income by as long as $190 million over the previous 3 years and inflated its stock numbers to cover for inadequate sales, the bush fund’s chief executive officer Carson Block stated on Wednesday at a seminar in London.
Shares of Elf dropped as long as 16% on Wednesday complying with the short-seller record however pared losses to shut 2.2% reduced at $119. The supply has actually virtually quadrupled from 2023 to strike a document high in March.
“Muddy Waters’ latest report is an attempt by a noted short-seller to negatively impact Elf Beauty’s share price for its own benefit and at the expense of all other Elf Beauty shareholders, and Muddy Waters’ allegations are without merit,” Elf stated in a declaration.
Elf increased its projections for yearly sales and earnings previously in November, ending up being the only firm doing well in a weak appeal market where tradition cosmetics brand names such as Estee Lauder and L’Oreal have actually been encountering reducing need.
The appeal firm likewise stated on Thursday that for affordable factors, it had actually submitted an ask for discretion with united state Customs and Border Protection in very early 2024, relative to personalizeds import information.
“Therefore, import data available to the public after February 6, 2024, does not include a substantial majority of our actual U.S. imports,” Elf stated.
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Devika Syamnath)
