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WHY HAS GRIFOLS COLLAPSED ON THE STOCK MARKET?



Grífols is a multinational company specializing in the pharmaceutical and hospital sector. It is the third largest company in the world in the plasma derivatives sector. Beyond its stock market value, the company is considered "strategic" for the USA as a supplier of resources, etc... whose disappearance could seriously affect the country.

On Monday, January 8, 2.024, the closing price of Grífols on the stock exchange was 14.24 euros per share.

On Tuesday, January 9, 2,024, the closing share price of Grífols was 10.55 euros per share. The fall was 25.91%. During the session, it fell by more than 50%.

The fall was due to the fact that the Gotham City Research fund published a report in which it stated that the company's shares had no real value. According to its analysts, the company's accounts had been manipulated to disguise a large part of its debts. These allegations have been denied by Grífols in a statement to the CNMV.


Gotham City Research is an investment fund specializing in bearish trading - that is, positioning itself in the stock market to gain if a certain stock falls. Their method consists of researching a company's accounts. Once they have finished their research, if they believe that the company is overvalued on the stock market, they position themselves to make money if the share falls. They then report that they are positioned downwards and the result of their research, trying to get as much publicity as possible in order to achieve a large drop in the company's share price. So far, their success rate is high: for example, their report on Gowex was the final straw for the company.

His operations, although considered by some as "shady", still have a role to play in the market: uncovering bankrupt or highly inefficient companies, and making them public. Because the longer it takes for a company to go bankrupt, the more likely it is that the damage caused will be greater. Obviously, making a profit with the discovery made, positioning downward.

The company announced that it had taken a downward position in Grífols in the report in which the company's alleged malpractices were discovered; if it has "closed" the operation today, its profits will have been significant.



For the moment, Grífols has recovered a good part of its fall. Several analysts have expressed their opinion that although they agree that Grífols' valuation of its debt may be low, they do not agree with the doomsday scenario put forward by Gotham City Research. It should be borne in mind that Grifols is a company that is studied and followed by many analysts. Gowex could go "unnoticed" as a more modest company, but not Grífols; a priori, it seems strange that no one else has drawn Gotham City Research's conclusions if the situation is so bad. Certainly, it is a highly indebted company, in an environment of high interest rates, an uncomfortable situation. But it doesn't have to be in a catastrophic situation.

The H&B team.





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