We are investigating whether Grifols, S.A. (Nasdaq: GRFS) (“Grifols”) has violated federal securities laws based on allegations in a report published today by Gotham City Research (“Gotham”) alleging that Grifols has “manipulated” its debt and EBITDA figures to “artificially” lower its reported leverage.
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Why is there an investigation?
Grifols is a plasma therapeutic company based in Spain that operates internationally.
On January 9, 2024, Gotham published a report alleging that Grifols “manipulated” its debt and EBITDA figures to “artificially” lower its reported leverage. While Grifols’ reported leverage is 6x, Gotham claims it should be reported at closer to 10x–13x. Gotham claims that should its “estimate of Grifols’ true leverage be correct, Grifols will face notably higher financing costs,” and “consequently, we believe shares are uninvestable, likely zero.”
Gotham also alleges that both GRF and Scranton Enterprises (a Grifols family vehicle) fully consolidate BPC + Haema onto their financial statements, which Gotham claims “is materially deceptive and incorrect.”
A supervisor at Spain’s National Securities Market Commission (CNMV) was quoted as saying that it “makes no sense to question the integrity of Grifols’ audited accounts or to ignore the information published this morning;” that “the CNMV is going to exercise its powers to clarify the situation;” and that “what we at the CNMV have to do is gather additional information to clarify the situation and see which aspects of the information need to be reviewed or analysed.”
As a result of the Gotham report, Grifols’ stock price has dropped over 20% in trading on January 9, 2024, as of 12:15 PM Eastern.